Why buy now?
Greetings from Telluride, All! I was reading an article this morning from my friend and associate, Lynn Whipple of Guild Mortgage, and she hit on something that I've been thinking a lot about lately. I've been hearing from many of you that you're going to wait until after the election to see what happens with prices and the economy.
I thought Lynn hit on something pretty important about why now is the time to make your move rather than later.
Aside from inventory being low nationwide (simple supply and demand that I won't bore you with as you all know that), but one thing that people forget to realize is that, as the economy heals, interest rates rise! Right now, with these rates, your buying power is so much greater than it will be as rates start to go up, but prices do not go down due to the lack of inventory. Lynn wrote:
The Treasury will have to sell even more notes and Bonds at auction to pay for the additional stimulus. Currently, home loan rates and Treasury price gains have been capped due to the already overwhelming supply of Treasuries being sold at auction each week. Adding more supply through more stimulus will put further upward pressure on rates.
More stimulus elevates inflation expectations. Inflation is the archenemy of interest rates. If inflation rises, rates rise.
Stimulus is an aid to the economy. It will help economic growth in many ways, which is good news. Bonds and rates don't like good news."