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| Beautiful North Fork Produce - Coming Soon! |
Last week the Federal Reserve released a statement
indicating that they could increase interest rates as soon as June of this
year. Since then, there has been a lot
of squawking about whether or not this is realistic, and whether or not any
increase will be significant. Should you believe that this will happen, this is
how the hike could affect almost all of us.
1. The good news:
A rate hike means that the Fed thinks the economy is healthy, based on the
indicators. While wage growth has been around 2%, not the preferred 3.5%, wages
traditionally fall behind the other indicators and is not a required precursor
to a rate hike. On the other hand, unemployment
is down to its lowest level since 2008!
2. Buyers beware:
Mortgage rates will rise. "People thinking of buying a house should act
quickly to lock in today's low rates" says Dean Croushore, former
Philadelphia Fed economist (http://money.cnn.com/2015/03/19/news/economy/federal-reserve-statement-interest-rates/).
We are already seeing an increase in the amount of buyers coming out to the
North Fork to take advantage of low rates, as well as many local buyers who can
now afford to purchase a year-round residence. Competition is up since there is
not a lot of inventory available yet, and we have seen an increase in bidding
wars or multiple offers on properly priced homes.
3. Sellers beware: Mortgage
rates will rise! (As will auto loans). If you read the above, the downside for
sellers is that some buyers will no longer be able to afford to purchase at
current prices, and we may see a price drop.
Right now is a GREAT time to list your home for sale, before any
significant changes occur in the financial markets.
4. Stock volatility:
Any increase in interest rates could make stocks less attractive to investors,
and possibly trigger a 'correction' (drop) of 10% or more. This will make
'savers' more profitable, since interest rates will also increase in bank
savings accounts, and also make bond investment more attractive.
5. The real deal: No
one really knows when (or if?) this hike will happen, but chances are very good
it won't be before June, possibly as late as September. This gives buyers a
chance to lock into a great mortgage rate, and sellers a window to list and
sell their home before a rate increase stalls or reduces any recent gains in selling
prices.
I constantly monitor the local market - click here for my most recent Market Report, and check the 'Links' on the right of the page for
previous reports.
Working hard to bring East
End buyers and sellers together - Certified Buyer Representative - call me
today at 631.766.2598
related links:
http://www.reuters.com/article/2015/03/24/us-fed-bullar-rates-idUSKBN0MK0YS20150324
http://money.cnn.com/2015/03/19/news/economy/federal-reserve-statement-interest-rates/
http://money.cnn.com/2015/03/19/news/economy/federal-reserve-statement-interest-rates/
http://blogs.wsj.com/moneybeat/2015/03/24/fed-to-markets-get-ready-for-higher-rates-but-not-too-high/
#homebuyers, #sellers, #realestate, #northfork, #mortgage, #mortgagerates, #homesellers
#homebuyers, #sellers, #realestate, #northfork, #mortgage, #mortgagerates, #homesellers
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