Sacramento Real Estate Views

January Interest Rates

The Lowest Ever

Interest rates have never been lower.  I don’t know that they can go any lower than what they have been this month.  While it’s possible to imagine that they could get into the low 4% range, I don’t know of any economist who thinks they will. That said, many of them have been incorrect about our current situation thus far. Going forward, it’s anyone’s guess as to what happens.  The new administration is shaking things up a bit but that’s a wait and see.

It Just Isn’t Significant

The difference between a 5% and a 4.5% mortgage just isn’t that significant to wait and risk that the rates will acutally go up instead of go down.

A $200,000 at 5% over 30 years, just principal and interest, is a payment of  $1073.64.  The same scenario at 4.5% is just a $60 a month savings. The savings is $720 a year in this scenario and about $5040 over a 7 year period.  We Americans aren’t very good at looking long term and the monthly difference between the two interest rates just isn’t enough to wait making a decision to buy, risk they will go up and then cost yourself money over the long haul if they do go up.

The interest rates this month have been hovering right around 5% for a fixed rate, 30 year mortgage.  They started the year around 5%, dipped down around 4.95% then have now popped back up over 5%.  While low, the movement down or up hasn’t been significant.

Sacramento real estate is going to be appreciating sooner than later at this point.  Whether, as some say, it begins going up next year or the year after that, your losses in purchasing now will be insignificant in comparison to the appreciation you’ll gain over the long term.

The Values in Sacramento Real  Estate

The word is getting out.  The inventory levels are lower than they have been in a couple years and while that will be changing soon, this year is going to hot, hot, hot in Sacramento real estate.

I’m currently working with investors from out of state and they are all saying the same thing:

“I want to buy multiple residential homes as quickly as possible.”

I’ve heard from many sources that the values will further decline this year.  I think we’re past the worst of it and that any additional value losses, barring a full scale meltdown of the country, will be minimal.  The value losses this year, all things staying similar, will be in the acceptable range for most investors given the long term gains.

What about  you?  Ready to dip your toe in the water?

Check out the Mortgage Calulator on the left sidebar.  It’s pretty cool!

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Tags: mortgage rates, Sacramento homes

This entry was posted on Sunday, January 25th, 2009 at 6:55 am and is filed under Mortgage Information, Real Estate Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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