Mortgage rates are holding low. If you’ve been paying attention to rates, they’re still very comfortable for home buyers. This encourages a few things. When we see lower mortgage rates, we see home prices rise and more home sales. This year in February, the National Association of Realtors (NAR) showed a slightly different thing though. Home prices rose for the 84th consecutive month of year-over-year gains, but home sales fell 1.8 percent when compared with a year to the sales the year before. The problem, experts believe is home buyers who have been on the fence about making the leap weren’t aware that the rates have fallen. They speculate that if they did know, home buying would increase before the rates go up again, while they are still low.

Interestingly, just a little inflation creates more purchases, because they want to get in before prices rise more. The problem is that while the Fed tries to keep inflation at 2 percent annually, the economy is changing and that’s hard to reflect in economic models. One big issue is focused around gig workers. More people are self-employed.

“The job market has consistently surprised the Fed,” Bloomberg News reported. “America’s unemployment rate has fallen to less than 4 percent from 10 percent in 2009. Despite the decline, employers have found plenty of workers to hire, generally keeping job gains strong, and inflation has responded only weakly.”

Rates were expected to hit 5 percent and keep rising in 2019, but some people are still talking about seeing rates in the 3 percents. In March, the 30-year fixed FHA had fallen to 3.688! One thing to keep in mind as a homebuyer though is that this market is completely unpredictable. Bloomberg News called it “the new unpredictable,” but Professor John Kenneth Galbraith might have put it best in saying, “The only function of economic forecasting is to make astrology look respectable.'”

So, buyers would be wise to take advantage of the obvious, current low rates. Those are here and real now. They could go up again at any time, but if rates drop significantly after buying a home at the current rates, refinancing is always an option.

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