The 30 year fixed rate is a multi decade low 4.57 percent. Yet no action has been spurred. I was told that the best time to buy a home is when interest rates are high (a relative notion) and sales are slow (recession = slow RE market). The idea is that since rates are high home prices are then at a low ebb since buyers must figure in stringent mortgage servicing costs into the home price purchase equation and the sellers have to price low in order to sell. The "how much home can you afford number" that a RE agent and the loan officer puts together would thus have the higher interest rate chunk limiting the price that seller could try for.

So if one can buy at low prices and near the top end of the interest rate cycle with a fixed rate 30yr, you could ride the refi train all the way down the line. Realistically its hard to do all of this since buying a home usually happens at certain times in your life –this notion of buying when rates are high and prices low is not one that is bandied about all that much. Probably because we have had steadily falling rates and creative RE finance for years on end.


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