While real estate inventory is low and housing prices remain steady, low interest rates are giving those looking to purchase a home a buying advantage. But what repercussions will we face as a result?
As of Thursday, Freddie Mac reported that the interest rate on a 30 year fixed mortgage was 3.24%, which is a whole percentage point lower than a year ago.
While rates are low now, Realtor.com expects them to drop even lower later this year, possibly below 3%.
Low interest rates are allowing first time homebuyers a chance at homeownership, while also maintaining demand and stable home prices.
However, experts expect to see some negative side effects resulting from the low rates such as less inventory in the future, and institutional investors buying up single family home inventory in bulk for rental purposes.
“Less mobility would likely translate into sustained home shortages and affordability challenges, unless builders meet demand, which they have struggled to achieve for years now.”