Have you recently been scrolling real estate listings dressed head to toe in pink? Us too!
If you're like us, you're super interested in the world of real estate and also a big fan of Barbie and her fabulous dream homes. You've been eagerly waiting for the latest Barbie movie to hit the screens. But are you curious about how the world of Barbie and real estate intersect? We were!
Buckle up because we're about to take a pink-hued trip down memory lane and explore what Barbie paid in interest rates throughout the decades when purchasing each of her dream homes.
It's worth noting that real folks have bought homes throughout the decades, no matter how high the interest rates were. Yes, even our style icon Barbie wasn't immune to these varying rates when buying her dream homes! Understanding these rates is crucial, especially for first-time home buyers and existing homeowners looking to make savvy investment decisions.
The Interest Rate of Dream Houses May Surprise You
The interest rate that was standard place on a 30-year fixed mortgage at the time each Barbie Dream House was released may surprise you.
In 1979, when Barbie bought her chic A-Frame Dream House, the interest rate was a whopping 11.2%. But this was nothing compared to the peak interest rates that would follow the next decade. Interest rates peaked at over 18% in the early 1980s. Assumable mortgages would become commonplace. That meant lowering the pools of homes to choose from to those who had mortgages the new buyer could take over.
Fast forward to 1990, when she bought her glamorous Bubble Gum Mansion, she faced an interest rate of 10.13%. The 16-18% interest rates of the early '80s had subsided to an easier-to-stomach 10.13%, opening up more options for buyers by 1990.
And by the time Barbie scooped up her Future Victorian in 2000, interest rates had dropped to 8.05%.
Now, let's put things into perspective: these were standard rates at the time. That's right! Everyone you knew who owned real estate at that time, even your neighbors, even your parents, paid near or more than these rates.
But What About Today?
But what about today's marketplace? Despite yet another rate hike looming this week, today's interest rates are historically favorable and below average at 7.2%. Sounds surprising, doesn't it? We've got more good news.
[Notice how rates didn't get below that 8.05% until into the 2000's?!]
Well, here's an interesting twist: there's an inverse relationship between interest rates and home prices. When interest rates rise, the value of assets, including homes, tends to go down.
[Notice the little dip that happened this year above when rates went up? Notice how its swooping back up as rates stay flat?]
This interest rate-influenced pricing pattern has created some opportunities in the market with slightly lower home prices and reduced competition. This presents two major opportunities for those purchasing homes right now.
#1 Home prices may be as low as they'll get in the next five years! That's right. Home prices are down in our area but back on the rise. Buying now could mean getting more home for less, but act quickly. Why?
#2 Many buyers surveyed have said they would wait until rates hit 5.5% before diving in. That means the competition is benched or at least slower to act. Buyers that act quickly can get the scoop on great places with less competition.
Conclusion?
Savvy home buyers recognize that today's rates actually offer an opportunity. Interest rates are historically low, have brought down home prices somewhat, and won't stay this way forever. When (not if) interest rates start to dip again, everyone will be buying, creating battles over homes and majorly inflating home prices.
This moment, right now, is a sweet spot for smart investors. Low competition. Decent rates. Lower prices.
So why not seize the opportunity? After all, if Barbie, who's navigated the turbulent real estate market throughout the decades, taught us anything, it's that every dream house is within reach, no matter the market climate!
Where to start
To learn more about how you can navigate today's market just like Barbie, reach out to our team of experts. We're here to help you make the best decisions for your real estate investment journey. Dream big because you're just as fabulous as Barbie!
Be sure to subscribe to our content and check your email weekly for more meaningful, helpful information AND invitations to our exclusive buyer events where we share all.
Note: all interest rates quoted above taken from bankrate.com and are for 30-year fixed loans. All images of Dream Houses above taken from New York Times. No Barbies were harmed in the creation of this article.
Voted Neighborhood Favorite by Nextdoor, Team Cool Murphy is a top-producing, licensed real estate team based in New Orleans, brokered by Cool Murphy, LLC.
Celebrated for her next-level creative approach to real estate, Elisa Cool Murphy is an award-winning, top-performing agent in New Orleans and the founder and leader of Cool Murphy, LLC.
Contact Her -
email: cool@coolmurphy.com
Facebook: @homeinneworleans
IG: @coolmurphynola
YouTube: @coolmurphynola
phone: 504-321-3194
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