Real estate prices collapsed during the Great Recession. In part, the fall in real estate prices can be attributed to the drastic decline in demand for housing. However, that fall is also due to the flood of foreclosed houses put up for sale, something that sent house prices tumbling because of increased competition.
Given the circumstances, it is not ridiculous to claim that the Great Recession happened to be an excellent time to purchase real estate. After all, real estate prices had fallen to unusual depths, meaning that smart consumers could secure real bargains with the expectation of being able to resell their prizes once real estate prices recovered. However, such a move remained outside of most people’s capabilities for the simple reason that most people could not afford such expenditures during the Great Recession. Not to mention that most lending institutions had understandable reasons for being reluctant to lend.
However, the present situation has changed. Real estate prices have been inching up ever since the Great Recession ended in 2009, but have not recovered to pre-recession levels. Furthermore, the Federal Reserve continues to set low interest rates in their campaign to encourage economic activities, while lending institutions are beginning to regain their confidence when it comes to making loans to credible consumers. In short, all of the factors are in place to make sure that the present will be one of the best times to secure either a mortgage or mortgage refinance for decades to come.
According to the Wall Street Journal, the current interest rate charged on the average 30-year fixed mortgage in the United States is 3.6 percent, which comes close to the all-time low reached in November of 2012.This means that consumers who choose to either borrow or refinance in the present will be able to use these interest rates, even once real estate prices recover and borrowing costs return to normal. Over the course of a standard mortgage, this can produce big savings that are otherwise unattainable for most consumers. At the same time, the time for seizing such opportunities is running out because real estate prices have seen big increases in recent times. For the moment, these increases are not enough to offset the cost savings from the interest rates, but that will change as time begins running out.