<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2z35GI_0wB1MyX000" alt="https://img.particlenews.com/image.php?url=2z35GI_0wB1MyX000" width="1920" height="1271" ></figure>Many potential home buyers – whether first-timers or repeat have embraced the mindset that they are going to hold off on purchasing until home prices or mortgage rates “normalize” or settle down.It’s no secret that home prices and mortgage rates are key drivers of affordable housing and two of the most frequent questions we are posed with as professionals in the real estate industry are, “how is the market,” and “how are interest rates.”Both are somewhat loaded questions as the answer can always be, “compared to what?”Although current mortgage rates may seem “high” depending on one’s perspective, trends may prove otherwise.Back in 1999, 25 years ago, the average 30-year mortgage rate was around 7.50%. For the next several years, we saw rates fluctuate between the high 5’s and low 6’s landing at around an average of 6.25% in 2008.Anyone recall what happened around 2008-2009?Rewinding back to that infamous time-period, it was the great recession AND the housing market was in shambles with the bubble bursting. Many homeowners were underwater – in many cases, home values were less than what they owed on their mortgage. Risky mortgage products – Pay Option ARMS, Stated Income Programs, and more, as well as subprime mortgages contributed to this disaster.One of the first steps on the road to recovery included jump-starting the housing market. Thousands of dollars in tax credits were offered to first-time homebuyers as well, as an added incentive to homeownership.The Fed jumped in and started buying mortgage bonds to help drive down mortgage rates.This process was known as quantitative easing and was in place from 2009 through the early 2020s. This action was key in driving mortgage rates to an artificial low of 5.00% or less for most of the time throughout this period.Shortly after QE came to an end, our country was faced with the whole COVID crisis in 2020 and 2021, so once again the Fed needed to intervene. The initial action step was to lower the funds rates to 0% which at the time, quickly drove mortgage rates to the lowest point ever which was under 3.00%.In 2022 when the dust settled and all the Fed actions to artificially lower mortgage rates had ceased, we started to see rates climb slowly and steadily with what initially appeared to be no end in sight. Rates had jumped to their highest level in over 25 years topping the 8% range in many cases.Even with the swiftly climbing mortgage rates, home prices followed right along with continued appreciation year after year.So where are we now and what do the trends tell us?Although the overall cost of living has escalated, the housing market is still very strong, despite mortgage rates returning to a somewhat normal range of the 6’s and 7’s.Homeowners have more equity than ever, so no real concerns exist with any bubbles bursting and appreciation remains steady and strong.Although no crystal ball exists to predict the future and of course anything can happen, but looking at history and trends, mortgage rates are at a fairly stable place right now with no real indicators of the need for artificial reductions.The trend points to stability at this time which can often be greatly beneficial to homebuyers for budgeting and future planning.-Copyright© Is The Trend Our Friend, Dan Ranck, Homesale Mortgage. 2024. All Rights Reserved.Dan RanckMortgage Loan OfficerNMLS #140989HomeSale Mortgage, LLCNMLS #1054689Direct : 717.271.2400 | efax : 866.849.4320dan.ranck@homesalemortgage.com | www.danranck.comFacts, opinions and information expressed in the Blog represent the work of the author and are believed to be accurate, but are not guaranteed. The Lancaster County Association of Realtors is not liable for any potential errors, omissions or outdated information. If errors are noted within a post, please notify the Association. Posts represent the author's opinion and are not necessarily the opinion of the Association.</div></body>

Mountain View, CA

NewsBreak

Is The Trend Our Friend?

Many potential home buyers – whether first-timers or repeat have embraced the mindset that they are going to hold off on purchasing until home prices or mortgage rates “normalize” or settle down. It’s no secret that home prices and mortgage rates are key drivers of affordable housing...