Construction costs are currently skyrocketing

In various media, interest rates between 3-4% are expected over the course of the year - currently a peak phase was reported...

So our bank is expecting 5% with normal loan-to-value ratio at the end of the year. Currently 5% with full loan-to-value.
I don’t see the 3% returning in the short term.

So our bank calculates with 5% for normal lending at the end of the year. Currently 5% for full lending. I don't see 3% returning in the short term.

Yes. At my former employer, the workload for the entire year was already planned at the beginning of the year. It rarely fit in the end; usually, from the middle of the year, everyone ran around chaotically because too much was closed (because too much was accepted based on the forecast)... despite a massive capacity gap according to the forecast at the beginning of the year...

This is based on a similarly sensible mechanism as the interest rate forecast at the end of 2023... namely calculating with what is known now how it will be in 9 months. That is nothing more than rolling the dice. At the end of 2023, there could be peace in Ukraine... or World War III. How can anyone make serious interest rate forecasts on this basis?

I base my assumptions only on probabilities and I consider the 5% to be significantly more likely than the 3% at the end of the year.

Experts are the people who are mostly wrong for various reasons. This is true for stocks, climate, corona, and probably also for [Bauzinsen] ;-)

We recently had to take out our modernization loan at 5% from our bank; unfortunately, we didn’t find it any cheaper and didn’t want to wait any longer (energetische Modernisierungen). We were quite surprised by that.

If we actually want to derive it somehow, then we have to look at the long-term interest rate chart for real estate loans, for example since 1972. And there we see:

A dramatic interest rate increase was always followed relatively quickly by a significant decrease. In 1972/73 the interest rate shot up to 11%, in 1977 it was at 6%. Then up to 11% in 1980, a low point in 1982 at 9.5% and around 7.5% in 1986. Etc.

So if we derive from experiences... how do we come to the conclusion that interest rates will now rise for 3, 4, 5, 10 years and no longer fall? The numbers since 1972 do not support that. So you look into the crystal ball... hope it is not a cursed Palantir...