We’ve heard a lot about low interest rates during the pandemic.
Lenders have cut rates as many Americans continue to struggle financially, which has impacted the ability to afford a lot of things, including a house or a car.
The year 2020 saw record low mortgage rates. It's a trend that Bankrate's chief financial analyst expects to continue into 2021, but there could be one problem potential home buyers could run into.
“I think the one big hang-up in housing has nothing at all to do with rates. It’s just the lack of inventory. It’s the lack of homes available for sales that's pushed prices up. It’s created some affordability issues and left some would-be homebuyers frustrated,” said Greg McBride, chief financial analyst at Bankrate.
When it comes to car buying this year, McBride says it will be a buyer’s market. He adds that affordability won't likely be an issue.
“Financing is not going to be an impediment in any way in 2021. Rates are already very low, and I expect they'll be more competitive as the year goes on and the economy recovery really starts to take hold,” said McBride.
When it comes to rates on savings accounts, McBride says you won't be raking in the cash off interest right now.
“That you know does not and should not deter you from accumulating that savings because that savings more so than the interest that you earn is the buffer between you and high-interest credit card debt when unplanned expenses arise and also having that money tucked away, nothing helps you sleep better at night knowing you are prepared for the unexpected,” said McBride.