The new reality

As 2010 winds down I know many out there are saying “Good riddance!” I say lets move on and may the new year be a bit more kind and gentle. As expected we limped along, some people lost their homes and others got great deals when buying a home to occupy or as an investment. As was also predicted months ago interest rates have begun to inch upward. Currently a 30 year conventional mortgage is hovering around 4.875% with FHA loans slightly lower at 4.75%. I was talking to an agent yesterday who was freaking out about her 1st time buyer and the ‘sky-rocketing’ interest rates. Really? I wouldn’t say they are sky-rocketing but rather correcting upward. 4.25% interest rates where not sustainable and in my opinion unrealistically low. It is time to move on and get use to the feel of our new reality…. interest rates under 5% are INCREDIBLE and homes have never been more affordable. The re-fi market maybe drying up but affordability index is at levels not seen in years (or decades!).