Anderson Homes, LLC

If you’re buying a Sequim or Port Angeles home, or getting ready to have your retirement home built, you can wait this market out, or you can take advantage of the lowest interest rates any of us have seen in our adult lifetimes. Under 5% for a 30 year fixed rate mortgage? Are you serious? Yes.

I’ve written elsewhere about Why Building a Home Now is Smart, and that it’s A Buyer’s Market in Sequim, and I wrote articles here about Low Interest Rates and The Perfect Storm, but who would ever have guessed that interest rates would be at levels as low as half a century ago?

I believe that when the market starts to breath again, inflation will slowly bring prices upward, but one of the first economic variables to go up is usually interest rates, so don’t be surprised if they dip as the are now to sub-five percent, and then level and start to climb in 2009.

Now is a wise time to build your retirment home if you are in a position to do so.

Update:   It appears that the possiblility of inflation is also something experts are predicting:

Robert Higgs at the Independent Institute notes the massive spike in excess bank reserves, from $2 billion to $559 billion, and wonders what happens once that money finds its way back into the real world:

At matters now stand, by far the greater threat is rapid inflation, notwithstanding the ongoing recession. When the banks begin to feel more comfortable with expanding the volume of their conventional loans and investments, they will have more than $550 billion  on hand  to employ for that purpose. The multiplied effect of such a  vast amount of  lending, as newly created deposits make their way through the fractional-reserve banking system, portends a gargantuan increase in the money stock and hence a correspondingly enormous jump in the general price level. As the public responds to the  acceleration of inflation by reducing its demand for cash balances, the increased velocity of monetary circulation will contribute to even more rapid price inflation.

So much potential new money is now impounded in the commercial banks’ holdings of excess reserves that it is difficult to see how the Fed will be able to stem the flood once the banks begin to transform those excess reserves into normal loans and investments. If the Fed attempts to sell enough government securities to soak up the growing money stock, it will drive down the prices of Treasury  bonds and hence drive up their yield, increasing the government’s cost of borrowing to finance the huge budget deficits  the government  will be running because of its various bailout commitments and so-called stimulus programs. This scenario holds the potential for a complete monetary crackup. [Source of Quote, Read Full Story]

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