October 17, 2020 archive. Greetings from Telluride! In the original note, I shared a discussion from my friend and associate Lynn Whipple of Guild Mortgage after hearing from buyers considering waiting until after the 2020 election. The timing and economic observations below belong to that period.
Lynn’s commentary described three ways additional fiscal stimulus could put upward pressure on interest rates:
These were economic mechanisms discussed in 2020, not a formula that made a later mortgage-rate increase inevitable. Mortgage rates also reflect mortgage-backed securities markets, credit and lender conditions. A Treasury yield is not itself a quote for a borrower.
The original note connected low rates and limited national inventory with a reason to consider buying. A lower interest rate can reduce principal-and-interest payments for the same loan amount and term. It does not establish that waiting will cost every buyer more or that home prices cannot decline. National inventory also does not describe every Telluride property or price segment.
When deciding now, compare current written lender estimates, the property’s price and condition, closing costs and ongoing taxes, insurance, maintenance and HOA expenses. Test the payment against your plans and reserves. Neither an election date nor this historical commentary can determine the right purchase date for you.
I would be glad to discuss your plans and the properties available for them. Text 970-759-4886 or email Anne-Britt to arrange a buyer consultation, including a Zoom conversation when useful.