When it comes time to buying home, whether it be a primary residence, a vacation home, or strictly an investment property, nobody wants to buy at the peak.  But with all the instability that we’ve recently seen in the housing market over this last decade, many are reluctant to try and forecast and speculate on any major housing trends that we may see in the near future.  But when it comes to mortgage lending and today’s interest rates, I think we can easily agree to speculate that they have nowhere to go but up.  Now this isn’t to say that this is going to happen tomorrow.  But without doubt, we know from history that sooner or later they must and they will rise back to a level most likely in line with some historical averages.

For quite a while now interest rates on mortgage financing have been hovering at an all-time record low.  The ability to get financing is sure tough right now, but for those that can qualify, it’s just about as close to free money as you can get on a loan.  And now that it has been about 7 years since we were at the peak of our housing market here in Mammoth Lakes, I would like to think that housing depreciation is finally over.  I know that most segments of our market have shown either stagnant values, or slight appreciation within the last quarter.

So assuming that our market is finally back to some sort of appreciation, or let’s even say it stays flat for the next year or two…  well then that is where the significance of today’s interest rates really factor in.  Because with the idea that they have nowhere to go but up, some simple math on a mortgage calculator can show you where locking in a 30-yr loan with one of these record low interest rates can be the difference of some huge cost savings when compared to even a 6.0% rate that not too long ago was considered extremely low.  And with this diagram above , you can see how anyone looking to buy for the long-term has always proven to be a good investment regardless of the ups and downs.  So once again, that is where owning an investment that you may possibly be paying a mortgage on for 30 years could prove to be the most profitable by financing it on a fixed rate mortgage at one of these extremely low single digit interest rates!

Written by Eric Leach / leacheric22@gmail.com / 800-921-6520