How Long can “Historic” be “Historic”

With so many ads touting  the historic lows of mortgage lending interest rates you have to be at least thankful that they have dropped the word: “New” when describing the historic lows.  Believe me when I say that we are all thankful (ok, well, maybe some lenders wish the rates were higher) for the historic low interest rates.  The stock market has been volatile enough that “The Fed” is not yet willing to risk hurting economic growth by letting the rates float up to what might be more normal levels given various market pressures.   But this artificial low cannot continue indefinitely.   Perhaps the rates have “hovered” near historic lows for a period long enough that some might consider it an “epoch”.   The Epoch of low rates!  Younger borrowers who love to use the word:  “Epic” might relate to this change of wording.   “Low rates of Epic proportions!”   If that doesn’t motivate potential homeowners sitting on the sidelines, nothing will.

They say everything goes in cycles.  And with all due compassion for landlords, hopefully, the cycle of falling back into home renting versus home buying may be ending . . . or it should be!   Rates truly are lower than any of the prognosticators thought they would be two years ago and we are coming up on the end of the first seven years since the recession of 2008 began to force homeowners out of their homes.   Whether foreclosure or short sale, the recession converted millions of homeowners into tenants.   Once having tasted the joys and responsibilities of home-ownership, will  those first victims of the real estate market collapse of 2008  consider the rental experiment a failure or a success?   For only a slight reduction in monthly obligations, were the repairs neglected, or was it bliss to have someone else be responsible?     The entire first class of short sellers have drained to the dregs the cup of  leasing and are now eligible to re-enter the home-ownership market.    For those whose credit is healed,  it is time to purchase now (and with a fixed rate loan! (-:) or wait for the next Epoch of Historic Lows of Epic Proportions.

And the flip side of the coin is that if you are considering selling your home, pray that you can catch this wave of “boomerang buyers”.    According to Realty-Trac, up to 7.3 million of these “boomerang buyers — who are primarily Generation Xers or Baby Boomers — represent a massive wave of potential pent-up demand that could shape the housing market in the short term . . .”

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