How does a 6%-to-7% mortgage rate look in the context of history?
In the 1980s getting an average mortgage rate in the 6%-to-7% range would have been cause for a national celebration. In 1981, the national average for mortgage rates peaked at 18.53% and took five years to get back in the single digits, and they didn’t stay there very long. While today’s rates appear high, they’re actually tame in comparison to what homebuyers in the 1970s and 1980s had to live with.
Freddie Mac has tracked national average mortgage rate data since the early 1970s, and from the 70s until the early 2000s, mortgage rates were often above 6%. It’s only in our recent history that we’ve seen historically low rates on average. Outside of 2020 and 2021, a national average mortgage rate in the 2%-to-3% is unheard of in American history.
Wharton professor offers his prediction for the housing market
Wharton professor Jeremy Siegel spoke to Yahoo! Finance and offered his prediction for the housing market based on current data. He sees the housing market cooling off by 10%-to-15% by the end of 2022. Siegel stated, “Housing prices by every indicator are going down, not up. Even rentals, yes they’re going up from contract from a year ago, but talk to the people on it, they say I can’t get the jumps that I got earlier this year.”
That’s potentially good news for home buyers who have stayed on the sidelines, waiting for rates and home prices to cool off. Only time will tell if Siegel is right.
Where are the best and worst markets for luxury real estate in 2023?
According to real estate consultancy Knight Frank, Dubai will be the most competitive market for luxury real estate in 2023, but they’re predicted a challenging year ahead for the 1%-ers market. For context, luxury real estate in Dubai was up 50% in value in 2022 due to several factors, but Knight Frank is only predicting a 13% growth rate next year. The consultants surveyed stated that they’re already started to see a shift from a seller’s market to a buyer’s market for luxury properties.
Miami came in second on the list, while American cities Los Angeles and New York also made the top 25.
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