“By publicly stating they would not raise interest rates this year, they communicated some concerns about our economy.”
There is some good news in the mortgage industry. The Federal Reserve did not increase its benchmark rate following its regular meetings last Wednesday. In addition, they signaled they would not hike rates this year.
What are the effects of this decision? It means the Fed is concerned the economy in the U.S. and around the world has slowed. Raising short term interest rates is designed to slow the economy down and maintain inflation at acceptable levels.
By publicly stating they would not raise interest rates this year, they communicated some concerns about our economy. This decision directly affects interest rates on consumer products from credit cards to the purchase of appliances and automobiles. Lower interest rates allow the consumer to purchase more goods and services.
How does that affect the real estate finance industry? With lower interest rates home buyers can potentially qualify to purchase a home or invest in a more expensive home. With buying season beginning, many first time and move up buyers should get pre-approved for a mortgage and start the buying process.
Those homeowners interested in downsizing should view this opportunity to offer their current home for sale and settle into the home they need to live comfortably.
If you have questions about any of the above information please contact me.