The economy is fickle, lets go back to trading chickens and eggs. Between the price of oil, employment rates, the pricing of houses, and a few other consistently inconsistent factors it’s really impossible to nail down where the economy will go next. It could go up, down back fourth, or to that extra dimension cooper visited in Interstellar, and that can be seen as concerning to some people.
If the economy is fickle, then so are your mortgage rates. Or at least the variable ones. If you get locked in at a 5 year fixed, well then you’re set for the next five years, you won’t have to worry about the disaster that is economics. But what if the rates go down and you’re locked in, tough luck unfortunately. But to many that is seen as an advantage. With a fixed rate the economy can go whichever way it pleases and you’re sitting pretty knowing regardless of how much of a mess it may become, for the next 5 years, it won’t impact you and your mortgage payments. Whereas those dealing with variable rates and shorter terms will consistently be living with high anxiety because if the economy decides to go up, and the government decides to increase rates, guess who has to suddenly start paying more. Which is why a 5 year fixed rate is seen by many as THE choice when it comes to a mortgage
Alas I have an alternative solution for everybody. Trade items instead of money. You want to live in my house, but not pay rent? buy the groceries and cook dinner, that’s your rent. You want to buy a house? How many farm animals do you have? Instead of worrying about the price of oil, we’d start worrying about the price of milk and if your horse wouldn’t get you where you were going you would call a vet instead of a tow. Put simply my suggestion is that we all become communes. By doing so we eliminate all possibilities for government and economic interference in our deals. Instead of getting the price of the house from whoever you’re buying from then putting a down payment, then having to get a mortgage and depending on the economy try and get the lowest possible rate, you could just organize with the seller to give him a few goats and be on your way. Alas I do not see this appearing in any economic forecasts, so for today I say we stick with what we got, and appreciate the economy whilst it’s doing well and grab the lowest rate then slam it into a 5yr fixed when it’s not doing well.