Dr. Steve Sjuggerud wrote an article recently with a much more positive spin on real estate, and which reflects what we're really seeing in the market. He showed graphs compiled by Global Financial of real estate data that literally goes back centuries.
The first proves that interest rates are the lowest they have been since 1900.
The last time mortgage rates were even close to this low in the past was just after World War II, and that was the precursor to the greatest postwar boom in housing prices – by far.
Mortgage rates bottomed in the mid-1950s, and house prices bottomed about the same time. Then the greatest boom in home prices in our lifetimes started.
Today we have record-low mortgage rates. And another thing in our favor is that homes are more affordable than ever. This information is based on the 40-year history of the Housing Affordability Index. "Affordability" takes three factors into account: home prices, your income, and mortgage rates.
Home prices have crashed, mortgage rates are at record lows, but incomes (nationwide) haven't fallen nearly as much… So homes are now more affordable than ever.
These graphs were an eye-opener for me. With all the negative press around, it was nice to read something positive on the subject.
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