Despite the banking crisis, there are still investment opportunities in the United States

The fall of three regional banks in the United States such as Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank, added to the uncertainty generated by inflation in this country, has put the financial system as a whole on alert. However, favorable conditions continue to exist for those wishing to invest in solid assets, such as the dollar and real estate in the United States.

The possibility of an economic crisis with echoes of both the bursting of the dot-com bubble and the financial crisis of 2008 raised alarm bells, but the truth is that the mortgage market continues to be a haven alternative in this context.

It’s time to get excited as the Federal Reserve, the US central bank, raises rates in response to rising inflation. The campaign is particularly aggressive, having increased eight times since the start of last year to appease demand.

However, historically, economic crises always create opportunities. In recent years, the real estate sector has been affected in various countries by crises and it is now the turn of the United States.

There is talk of a slowdown in the real estate market in recent months, due to rising interest rates and declining consumer confidence amid an impending recession, making future homeowners doubt the next big purchase.

However, the rise in rates slowed the rise in house prices, which had reached all-time highs, for example in Florida during the pandemic. We have seen historically low interest rates while house prices have reached an all-time high. Currently, rates remain below inflation. The real estate scenario has a cyclical movement approximately every 10 years.

Consumers who are concerned about high interest rates may benefit from lower real estate and brokerage costs. Rates have increased since the pandemic over the past two years, but historically remain relatively low. Mortgage rates reached 18% in the 1980s, which is much higher than today’s rates.

Mortgage refinancing is the process of exchanging your old loan for a new one. In this context, the property is accessible with a lower value compared to previous years. Also to better credits, with lower rates, when the market demands it and to reduce your monthly payment.

Based on historical mortgage rate data available from Freddie Mac, it becomes evident, with the exception of a peak in the 1980s, that rates have declined every decade so far. The average rate in 1971 was 7.54%. In 2020, the average rate was 3.11%. So rates that low probably won’t come back for a while.

The author is a founding partner of QKapital

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