Too often the media and the common consumer equate low interest rates with the best time to buy. The missing piece in the equation is inventory. As we have seen over the last two years, interest rates have been well below 5%, but our inventory level has hit a historic low.
Recession Coming! (?)
- Consumer is getting stretched.
- Maxed out credit card balances hitting an all-time high.
- Average credit card interest rate = 19%.
- People are living off credit cards and savings.
Mortgage rates go down during recessions. By definition, a recession is deflationary and when inflation trends lower – so do mortgage rates.
Housing stays strong through recessions! Aside from the “Great Recession” in 2008, home values have increased during recessions.
If we are not already in a recession, we can see a recession is coming. However, this is not all bad news. The data above clearly shows that some of these trends are actually healthy for the real estate market.