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Deal of the Centuries, 20th and 21st

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I was in a class today, and one of the comments from the instructor made me think about a response I gave a client yesterday. They ask me if I thought it was better to buy now or wait till next year, after the election.
The speaker made me think about that question a bit deeper because of her simple response.
We know the housing market will change. No matter who wins the White House, Congress, our local elections, the market will vary from where it is now. It is always evolving, and elections have a significant effect. Right now, we know that there are historically low-interest rates. That is really about all we know; besides, it will change. We cannot predict how it will change... just that it will. (heck, we can't really forecast tomorrows weather )
Is it the right time to buy or sell? Only you can answer that question for you. If you ask me, I will say it's always a good time - if the time is right for you and your family.
Below are some data from FeddieMac on Average Rates and monthly payments on a $200,000 mortgage since the 1970s.  I hope you find it as interesting as I did.

Mortgage rates play a significant role in how much home you can afford, and it's important to watch them carefully as a homebuyer. The lower the rate, the better -- even a small rise in rates can make a home that was once affordable, unaffordable.

Mortgage rates change frequently. Over the last 45 years, they have ranged from a high of 18.63% (1981) to a low of 3.31% (2012). While it's not likely that the average 30-year fixed mortgage rate will return to its record low, the current average rate of 3.45% is pretty close-- all to your advantage.

To put the financial importance of mortgage rates in perspective, this chart outlines a $200,000 loan financed at various rates over the past 50 years.

Date: 1970s Average Rate: 8.86% Approximate monthly payment on a $200,000 mortgage: $1,589
Date: 1980s Average Rate: 12.70% Approximate monthly payment on a $200,000 mortgage: $2,166
Date: 1990s Average Rate: 8.12% Approximate monthly payment on a $200,000 mortgage: $1,484
Date: 2000s Average Rate: 6.29% Approximate monthly payment on a $200,000 mortgage: $1,237
Date: 2010s Average Rate: 3.99% Approximate monthly payment on a $200,000 mortgage: $954
Date: February 27, 2020 Average Rate: 3.45% Approximate monthly payment on a $200,000 mortgage: $894

Source: Freddie Mac Primary Mortgage Market Survey(R) (PMMS(R)). Tracking through the PMMS began in March 1971. Mortgage payments are principal and interest only, based on a $200,000 fully amortizing mortgage. All terms are assumed to be 30 years. FreddieMac.com/pmms/

Buying a home is a big investment -- perhaps the biggest one you'll make in your life. So, it's important to be sure you're ready to make that purchase. If you are ready, today's rates are not to be missed.

For more information on buying a home, visit My Home by Freddie Mac(R).

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Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the HRIS.

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