Wow…can you believe it?!? Interest rates have gone up a whole percent! That means the cost of money has gone up. In fact, depending on where you were getting your money and the terms, it just cost you 25% to 30% more for your money! Why, it means you might have to pay a whole 4% for long term loans.
Sounds terrible doesn’t it. Except when you stop and think about the average interest rate for the US from 1971 to 2013 was 6.14% or 54% higher than the 4% people are worried about today. In fact you have to go back to the late 1950′s to hit interest rates down at 4%. Here something, did you know what the interest rate was in say 1798? 10.04%…1824? 5.19%…1842? 11.49%…1857? 9.91% (source http://www.arborresearch.com/bianco/?page_id=46908)
The point is, yes interest rates have gone up and after being at record lows for awhile it is sometimes startling to see a jump. Especially a jump of 100 points. But in the big picture we are currently enjoying wonderfully low rates. And if consumer confidence is coming back. If consumer spending is coming back. Rent increases are happening at steady pace. In particular those in HOT MARKETS…ie Houston. Then, perhaps, those of us in the rental business can still feel bullish on purchasing a few more building and taking a few more mortgages at these record low rates.
Does not mean don’t watch the interest rates. And I would certainly recommend you lock in your loans at these current rates for as long as you can get. But panic…let’s save that for another time.