Fed Pauses - You Shouldn't
Harry Venik with Adams Mortgage in Colorado Springs wrote a very informative article today about the Federal Reserve and why you should buy now. The following are excerpts from his article.
The Federal Reserve, taking a break from its aggressive rate-cutting policy, chose not to alter key interest rates Wednesday, leaving the Fed Funds rate at 2.00% and everyone wondering where interest rates are headed next.
The Fed is in a quandary. The economy has slowed, led by a decline in home sales and rising inflation, stemming primarily from increasing energy prices. The Fed's primary role in relation to the economy is to combat inflation and preserve economic growth. To combat inflation, the Fed will ultimately have to increase interest rates in coming months.
What Does This Mean to Buyers in Colorado Springs?
If you're looking to buy a house, consider these key points:
Home prices in some areas are at five-year lows, while personal incomes in that same period have increased. Homes are more affordable for many right now, particularly first-time home buyers. Colorado Springs home prices have decreased on an average of 5%; although this amount varies neighborhood by neighborhood.
Sellers are extremely motivated and many buyers in Colorado Springs have benefited from the unbelievable deals that exist today.
Experts foresee a strong rebound in home prices when the economy begins to recover, according to a new report from the Joint Center for Housing Studies. That means buyers today will be sitting on valuable properties tomorrow. Remember, annualized appreciation for homes exceeded 6.35% from 1940 to 2000.
Housing booms follow housing busts - and the savvy buyers aren't afraid to jump into a tough market. But these savvy buyers know that homeownership is a long-term investment. Ultimately, population growth and demographics point to a stronger housing market in coming years.
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Posted by KAT