Experts have predicted rising interest rates for more than a year. Truth is, interest rates for home loans are still at historic lows. Actually, interest rates have dropped in February of 2015.

According to Freddie Mac we may only see a modest increase of mortgage interest later this year.

Some home buyers may be tempted to delay their house hunting adventure in hopes of interest rates dropping even lower. There are many good reasons why you should move forward right now, even if interest rates stay where they are until the end of the year.

Why Interest Rates Dropped in 2015

There are 2 reasons why interest rates have decreased and will remain low: the oil price and the European economy.

First, there’s the oil price, which plummeted at the end of 2014. That’s great news for drivers. Now it takes half the cash to fill the tank of your car.

Lower oil prices resulted in zero inflation. And a low inflation rate pushes mortgage rates down.

Why Interest Rates will Remain Low

While the US economy has improved considerably last year, the European economy slid back into a recession.

In order to stimulate their economy, the European Central Bank has dropped interest rates (like the US did 5 years ago). As a result, the US Dollar has gained strength against the Euro. This means it is less expensive for Americans to buy European goods.

If the Federal Reserve would raise interest rates, the value of the US Dollar would increase even more, American goods would become more expensive abroad, and our economy would suffer. The Feds simply can’t risk a slow-down of the American economy at the cost of higher interest rates.

The Feds don’t want to attract more foreign investment to the US, at the cost of our European allies. A strong European economy means more US exports and the potential for economic growth on this side of the Atlantic.

Why You Must Act Now

If you want to buy your first home or if you want to move up, you must act now.

Due to low listing inventories home values will continue to go up in 2015. They increased by 10% in Columbus last year and there’s a very strong demand from buyers looking to move into a new or existing home in 2015.

Even if interest rates stay low, your purchasing power decreases every month due to higher home values.

Take advantage of the the current market! You may have to settle for a much smaller, and less expensive home, if you wait another year!