Interest rates are not high

[Chris Seveney]

I keep seeing a lot of posts with people noting “interest rates are high”.

Just want to say, no they are not. I don’t need to post the charts here as a simple google search will note this. Last decade interest rates have been super low

If anything is “high” it would be home prices as those in June were all time highs

I would also not plan on rates going back down to 3’s anytime soon (if ever) so investors should be modeling their returns more cautiously and based on what’s in front of them.

Just my vent for the day.

[Scott E.]

I agree Chris that interest rates are not "high" when looking at a historical chart like what @Randall Alan posted.

But interest rates are high right now compared to the price of real estate. The median price for a single family home in the US is around $370k right now. Thats about 3% higher than 1 year ago today.

Rough numbers, rounded for simplicity:

-In Nov 2021 you could buy a house for $360k and get a 30 year fixed loan at 3.25%. This would come with a P&I payment of $1,566.74 per month

-In Nov 2022 you can buy a house for $370k and get a 30 year fixed loan at 6.25%. This would come with a P&I payment of $2,278.15 per month

So yes, rates are not historically high. But payments are. And isn't payment what really matters?