This chart is a good way to monitor the 30 year fixed rates. This is the 10 year treasury notes. The long term lending rates follow almost identical to what the 10 year note does. Lately, the 30 year rates have been lagging behind the 10 year moves, but I believe that is just an effort by the lenders to recoup some of their losses from all the foreclosures. My point is, if you want to know if rates will be increasing or decreasing, watch the 10 year treasury.
(Unfortunately, this chart looks about like my poker winnings this month, but that is another post...)
As you can see, the 10 year treasury note has not been this low since 2005, hence the 30 year rates at a 2 year low. To check the 10 year daily click here. Please note, the 30 year rates DO NOT EQUAL the 10 year rates. The 10 year is dropping below 4% as the 30 year rates are dropping below 6%.
On December 11th, the Federal Reserve will once again cut the Federal Funds Rate. This is a short term lending rate used for banks and not directly tied to 30 year fixed rates. The last two times that the Fed cut those rates, the 30 year rates spiked upwards. They did settle back down, but don't think that those cuts will immediately mean a drop in long term rates.
With the upcoming election, I don't foresee any big movements in lending rates, as no-one wants to be blamed for economy swings (at least ones that can be perceived as bad). I do know that this is a great time to buy. And with foreclosures at all time highs, you can find great deals. I know of new construction houses selling for 25% less than where they were 1 year ago. That's a $400,000 house selling for $300,000. Pretty amazing. And that is just in the Midwest. Coastal regions are seeing much bigger swings in value.
If you have any specific questions, feel free to let me know.
Buying real estate today for a long term hold is +EV.
3 comments:
it is almost scary bro...
Philadelphia Suburbs.
Two different new developments.
One started 3 years ago, the other 2 years ago, both offering 600k houses
The first one sold out in 4 motnhs
The second one sold 2... they have built 7 of the projected 18. One is occupied, 2 are "under conract"
I haven't checked to see what they have gone for but have heard that they went substantially under the asking of 6
Real Estate today is gold if you have the cake, the credit, and the backing to carry it.
Unbelievable to me as well, is the proliferation of "rental" homes that are available. People are inheriting at a fast rate, and can't sell them...
Very good opportunity for those with the means. Pull your stocks and invest in RE... Its like getting action with flopped Quads!
does this apply to nyc also?
I don't like trying to call bottoms, whether it's stocks or home prices. If I had the $$$, I think I'd wait to see a sign of a bottom.
Looking at this chart, it doesn't look like median home prices have bottomed yet.
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