Real Estate — Buyer and Rate Relationship
There has been a phenomenon going on in the market over the last few months. The historically low rates are having little to no impact on buyers any more. Buyers have become too comfortable with these rates and are taking them for granted. Most buyers in the market right now are people that are ready and able to buy, but their decision is not based on low rates… they are simply an added bonus. The buyer’s that should be taking advantage, are not. The reality is that there is no possible way the banks can sustain themselves with rates this low forever. The trend of low rates being undervalued by the general buying pool has been going on for about 4 months.
To throw an analogy at you…This trend reminds me of a relationship where you are taking the person you are with for granted. In most cases like this, change will only come if the one being taken for granted decides this is not what he/she wants anymore. When this happens, the person taking the other for granted will immediately change their ways and realize their mistakes. Well… The same goes for the relationship between buyers and low rates. I think it is about time banks (and the government) crack the whip and let rates creep up. This will give buyers a much needed reality check and help them realize that taking low rates for granted is a mistake.