Interest rates may be considered high … if you look at a very short-term window. When my parents were selling real estate in early ’80s, rates were in the 17-19% range. Ranting about 6.5% seems a bit … silly. Rates have actually dropped a little bit in the past few days (not reflected in the graph below because the reduction is statistically small, and December’s data is not included – on average from 6.28% to 6.26%)
30 Year Fixed Rate Mortgages, Month-by-Month 2005
Rates are still very, very low. The housing market in the Charlottesville/Central VA region remains very strong with some clear signs of a Buyers’ market emerging. So long as rates stay in the single digits, I expect the housing market to remain strong. Housing will (and needs to) return to being regarded as 1) a home and 2) a relatively long-term investment.
Source: Freddie Mac
5 year ARM