The Fear and Reality of Rates Rising

....I read too much....

When will the sky start falling? It's a question put forth nearly every 3 days by some financial expert about the current state of real estate in today's day and age. I read articles constantly about the real estate bubble bursting and unfortunately, none of them are about how to be prepared.
The consensus among those pessimists is 'soon, any day now, like really, it's going to happen, this can't last forever, the real estate bubble will burst.'

But man, doesn't it feel like they have been saying this forever?

I admit I am fairly new to the mortgage broker business. I've never seen a public lender rate at above 6% (which was my 1st house mortage). I can't fathom my parents' mortgage, where they had loans of 11-18% interest. So what's happening?

I'm not financial expert, but here's one thing; Money is not infinite. There has to be balance. This is kept in check by 'inflation'. You may remember discussing this in high school economics or socials class. At one time, governments thought the easiest answer to nobody having money was just to make more. I remember my teacher using Post-Germany WW1 as an example of inflation.

And then I found the Internet using this as an example.

But that was centuries ago! Well, not really. More like only 1 century ago. So this idea of inflation or cause and effect, taken as a moment of time in all known history is relatively new.

"You Want to Buy a House? hahahaha" - my dad

Now is the time to buy a house (or condo, apartment, cottage). Everyone involved in buying houses says so. Heck, I'm saying it because financial institutions want to pay me money to get people to come borrow hundreds of thousands of dollars off of them, securing their financial security for decades to come (the institutions, not you).

Statistics that I am pretty certain exist somewhere show that most people prefer to live in some type of domicile that can hold not only all their stuff, but perhaps even have sanitary facilities, a lockable door, electricity and windows without bars.

Expectation

So why should you wait? If you are like most people you probably are waiting because you saw those for sale signs on people's lawns, checked out the price on the internet then sadly looked at your bank account or paycheck and thought WTF?

Reality

The concept of purchasing a residence of your very own slides quickly away as you wonder how the heck anyone not born in the sixties or seventies who is not on television or in banking can afford to buy such a luxury when you are still budgeting to pay off your student loan, your credit card and/or returning bottles for bus fare to get to work and back.

A nice compromise but for the travel. 

There is a sense of security that comes with having your very own place, but also a sense of ... 'Uh oh'... if you decide to buy a house that you can live in but not do much else. It's often called 'house poor'. All your disposable income you thought you had at your fingertips is destined for 'house-related' things. Perhaps you need a new fridge or have neglected to factor in property taxes. You have crap windows so your heating bill triples during winter. The roof has started to leak or you have a severe bug infestation which would make Mike Holmes shake his head in disgust at how a house like yours could possibly even be in existence.

We will have to tear out the kitchen and
may as well finish your basement while we are at it.

If you already are a home owner, you know what I am talking about. You need to pay for all of these unexpected expenses somehow. If you don't have kids maybe you can bring in a couple of roommates, forget the concept of privacy for a couple of years (and maybe your television when they move out in the middle of the night). But I'm getting ahead of myself.