The chart below explains what people mean by “historically low interest rates.” There have only ever been a few dips in the past 200 years that have been much lower than where we are hovering today, around 3.43% for a 30-year fixed. The real question is, where will they go from here?
For planning purposes, it would be best to expect that the improving economy will raise the rates in the coming year. It seems safe to assume that rates will stay below 4%, but it is always possible that they could go higher if economic growth or inflation step up. After all, it was inflation that was responsible for the runaway rates of the ’80s. If this holds true, the spring buying season should fare well.
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