A weak jobs report pushed the yield on the 10 year treasury to below 1.5% for the first time in history. If you didn't think we're living through historic times, you better change your tune quickly. Read more...
If you have been on the fence about refinancing or purchasing a home, think of it this way. Back in the early 1980's, Paul Volker, the Chairman of the Federal Reserve at the time pushed interest rates up to historic highs to quell inflation. At that time you could have bought a 30 year treasury bond at rates upwards of 14%. Imagine locking in a rate like that!
Well, you now have the same opportunity on the other end of the spectrum. In 5 - 10 years, we'll be astounded that rates were this low. It will also put massive upwards pressure on housing prices.
Home values move in relation to supply and demand. Assuming it takes a few years for rates to move away from these historic lows, we can expect a very limited supply of homes for sale in the future as homeowners will want to hold onto their cheap mortgages. First time home buyers and those home owners forced into moving due to a relocation or family expansion will find very few homes for sale. With low supply comes high prices. Additionally, they'll have to pay higher rates for their mortgage.
If I were a betting man, I'd begin buying home builder stocks in the very near future because only new supply will keep prices from skyrocketing out of control.
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