Although buying a house or condo seems risky right now, to some people, it still makes sense, for most, at least according to this reporter from The Washington Post:
It’s easy to get caught up in the upward scooting of mortgage interest rates. But take the northward movement with a grain of salt.
Some people act like Chicken Little and feel as if the sky is falling when interest rates go up a quarter of a point, said [Jim] Gaines of the Real Estate Center in Texas. Instead, keep it in perspective.
Interest rates are still way below what they were five or six years ago, he said. Even if the 30-year hits 7 percent by the end of the year, investors should keep in mind the double-digit rates of yesteryear.
The annual average for a 30-year fixed-rate mortgage was 16.63 percent in 1981, and worked its way down to 9.25 percent in 1991, according to Freddie Mac records. Homeowners may not get rates quite as low as what they could secure in 2004, when the annual average for the 30-year fixed was 5.84 percent. But relatively speaking, it’s still a deal.
If you’re in it for the long haul — that is, buying a home with the intention to live in it for years — a home is still a decent investment.
In It for Long Haul? Might as Well Buy Though Rising, Rates Are Still a Bargain – By Amy Hoak, The Washington Post
Once bubble bursts, cities feel the pain – Housing market riddled with speculation – By Joel Kotkin, San Francisco Chronicle