Let’s talk about interest rates. There’s a ton of buzz around this topic right now and everyone we talk to seems to have increasing anxiety about interest rates. So… should we be concerned?

The short answer is “no.” 

The longer answer? Interest rates are still really low, and yet they are going up. In November of 2018 this CNBC articleparaphrased a US Federal Reserve Chairman’s statements with the comment, “the Federal Reserve made clear it sees a near perfect environment to keep raising interest rates and that it was undeterred by recent market volatility.”

Interest rates are definitely going to continue rising. According to Freddie Mac’s latest report interest rates have risen year over year since 2016. Below is a graph with the data from that report which shows the annual national average interest rate since 1972. What you may not know is that they are still much lower than almost ever before.

The 40 year average mortgage interest rate is 8.3%. This means that even though rates are on the rise, rates are still at almost half of the 40 year average (everyone clap please, this is great news).

Okay, all that is good to hear, but what does its actually mean to us as investors?

It means we should stop fretting about small rises, stop trying to time the market, and keep buying real estate. Rates are still low, so take advantage and lock in your 30 year fixed rates before they rise again.

We keep rising interest rates at the forefront of our minds. As investors, we are buying a lot right now. As providers, we are committed delivering competitive rates of return on the properties we offer. As interest rates go up, this will only become more challenging.

It’s not super fun to hear interest rates will continue to rise, however there’s no reason to worry. The best time to invest is today. We preach that everyday. Smart investors can win in any market as long and they understand the market.

We love staying up with the market. If you have additional questions or just want to talk shop please don’t hesitate to reach out anytime!

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