Don’t fixate on interest rates

Mood of the Market
Published on Aug 2, 2011

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by CareyBot

I've diagnosed America once before with a mental health issue I call "housing-crisis post-traumatic stress disorder." But today, I'd like to cover another: interest-rate fixation.

Rates are low -- really, really low. And artificially so, as time goes on, the government is slowly allowing some of the programs they imposed to keep rates low -- to encourage buying and a housing recovery -- to expire.

But it seems that the lower rates go, the lower we want them to be. My dad reminds me that in the early 1980s, rates ran as high as 15 percent, and people still bought and sold homes. Yet, after last year's 4 percent rates, buyers being quoted 5 percent are turning their noses up at it, considering whether they ought not just take an adjustable-rate