The Wall Street Journal recently reported that on July 16, 2020 30 year fixed mortgages hit their lowest level ever in at 2.98%, with 15 year fixed mortgages at 2.48%. It seems that every few months we hit a new low.

The low supply of housing inventory paired with the lowest interest rates ever has caused pricing in Los Angeles to stabilize from March and in some situations go up. Currently, buyer’s want to buy motivated by low rates. Seller’s who are interested in selling should take advantage of market enthusiasm.

Looking at real estate over the longer term. One of the effects of interest rates lowering over time is that mortgage payments are relatively cheap on a national level. When you compare the appreciation in real estate values against the mortgage payments, the monthly payment hasn’t grown nearly as much. This is because of interest rates falling over the last 30 years. From A Wealth of Common Sense, Mortgage rates are insanely low, “The growth in the median sales price since 1990 is close to 190% while the monthly payment is up just shy of 40%.”

With the federal government stimulus, forbearance on mortgages, and the moratorium on evictions. There is a lot of uncertainty lingering over the economy and housing. With that being said, housing is currently on of the brightest segment of the economy. In a post by National Association of Realtors, “Yun (NAR Chief Economist Lawrence Yun) expects that the positive GDP growth of 4% in 2021 will boost both existing and new home sales, which he forecasts to grow by 7% and 16%, respectively. Mortgage rates are anticipated to stay at near 3% over the next 18 months. Home prices will likely appreciate 4% in 2020, before moderating to 3% in 2021 as more new supply reaches the market, according to Yun.”

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