Don’t plan your year around a post-election turnaround, lender says
“Rates, this is historically where we’ve been at in that 7 to 8% range,” he said. “Maybe it’s 6 to 8%, but it’s not unreasonable. It’s not like 10, 12%, but this is kind of the new normal.”
While Weinberg has seen these rates before during his 30-year career, it’s the combination of the rate environment with elevated home prices that makes the situation different.
“Historically, they’re about where they were,” Weinberg said. “My first mortgage was at like 7.5%. Real estate prices are a lot higher, so it makes it pretty hard to stomach a 7.5% mortgage. If you’re paying $150,000 for a house at 7.5%, it might not be that bad. If you’re paying $450,000 or $500,000, median home price, now it stinks a little more.”
The gap traces back to the low-rate years after the start of the pandemic, Weinberg said. He blames Washington for actions then that have consequences now.
“You can blame our federal government for this because they are the ones that lowered rates during COVID and everything to make these 2% and 3% rates to pump money into the economy and buy mortgage bonds,” he said.
