I happened to be reading The New York Times Business Section today and lo and behold, a journalist decided to write an article about today’s real estate market and why it has become so hard-pressed.
Of course, I had to read it—laughing that the reporter was writing about things I had been saying for more than nine months ever since mortgage rates started climbing like high blood pressure. I wondered what had taken him so long to realize that supply and demand issues were at play that were causing the price of houses to climb while there was less and less inventory available, but I guess up until now he was asleep at the wheel.
Interest rates, as we all know, have been climbing regularly for the better part of the year. When or if they will ever drop down to the 2 to 3% range that so many of us have become accustomed to is anyone’s guess, but realistically, the way the economy has been going it is doubtful we will see those low mortgage rates again for the foreseeable future.
Years ago, rates between 7 to 7.5% did not seem so high and were pretty standard. Except for the early 1980s, when interest rates went up to 13 to 14% for a 30-year fixed mortgage, it was quite common for the rates to fluctuate a few points up or down so long as they stayed within that 7 to 10% range during the ’80s and ’90s. It was only years later that we started to see rates drop down, first to 6% and then to 5%, which at the time we thought was a great bargain until they dropped even further to 4%, which made the previous 5 to 6% rates feel like “high” mortgage rates.
Any way you look at it, during the last 10 to 15 years, we have become fixated on lower and lower rates that enabled us to buy more expensive homes while still being able to afford the mortgage payments that went along with them.
Back to this The New York Times article. I was nodding my head as I read items I agreed with. Yes, even with lower rates, housing prices continued to climb. Yes, people were able to afford bigger houses as the rates fell to 3% and in some cases, as low as 2.5%. Everyone who bought during that period was sure to get a great deal by being able to lock in a 30-year fixed mortgage at a rate just above “free.”
When I reached the part of the article where he elaborated that those who had the foresight of locking in low 30-year mortgage rates were hurting the buyers of today who, because of bad-timing, lack of money, or lack of economic savvy, had failed to buy houses when the interest rates were low, I did a double take. He further elaborated that those same savvy buyers had effectively “tied up” the housing inventory on the “backs” of those economic “have nots.” Naturally, I realized the guy is a Progressive, a left-winger who finds fault with those who are educated about the financial system and use that knowledge to lift themselves up to the middle- or upper-middle classes, while those at the bottom, the “have nots,” may not have been savvy enough to take advantage of the system, or waited too long to buy, and are now in the unfortunate position of not being able to afford a home and must now save for a longer period of time.
I cannot understand this line of reasoning, that if one man benefits from the system by taking advantage of supply and demand forces (buying low and selling high), he is somehow “at fault” because a less shrewd fellow fails to take advantage of the same system. He was almost insinuating that the savvy guy is further at fault for not taking the ignorant one along with him so he can benefit as well.
Something is really skewed with this Progressive viewpoint, and their line of thinking is not relegated to just real estate; it extends to their entire world view, that the underdog is only an underdog because the guy who excelled in life had no right to leave the underdog behind.
We have to do something about the Progressive way of thinking. It’s not Democratic; it’s not Liberal; it’s not moderate, and it’s certainly not Conservative. It’s slanted, Socialistic, and un-American, and highly dangerous for the future of our country.
Anessa Cohen lives in Cedarhurst and is a licensed real estate broker (Anessa V. Cohen Realty) and a licensed N.Y.S. loan officer (FM Home Loans) with over 20 years of experience offering full service residential, commercial, and management real estate and mortgage services. She can be reached at 516-569-5007 or via her website at www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa@AVCrealty.com. Read more of Anessa Cohen’s articles at 5TJT.com.