The FED (Federal Reserve Bank), has taken a break from its aggressive rate-cutting policy. After cutting the rate 7 times since last fall; they chose not to change the FED funds rate, leaving it at 2.00%. Everyone is wondering where interest rates are headed next.
The FED has indicated an increased concern over inflation. This means the Fed could start increasing rates as early as its next meeting in August; to help curb inflation. One of the Fed's primary roles 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.
Now keep in mind: the FED funds rate (which is the Interest rate at which banks borrow money); is not the 'Interest rate' charged on Mortgages; but it does indirectly affect mortgage rates.
What's a Buyer to do?
Should a Buyer wait? What if we are heading into a Recession?
Since 1980; the average recession has averaged about 9 1/2 months. Of course by the time an actual Recession is declared; it is usually almost over already.
(I am no Economist - but I say - YES we are in a Recession.)
According to research from the Harvard Joint Center for Housing Studies; the Housing Market; quickly rebounds - in the first 3 months after a Recession.
Consider these key points:
Home prices in some areas are at 5-year lows, while incomes in that same period have increased. There are some great deal out there!
Sellers are extremely motivated!! Buyer should take advantage of this.
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. Buyers today should take advantage of this opportunity.
Housing booms follow housing busts - Ultimately, population growth and demographics point to a stronger housing market in coming years.
Lastly; keep in mind: Summer in the DC area brings a slower Buying and Selling season. Motivated sellers know this. Buyers should take advantage of this time.
Call James for all your Real Estate needs and questions; servicing Virginia, Maryland and the Greater Washington DC area.
Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW Suite 100
Washington DC 20016
202-351-5800 Main Office
Licensed in DC,MD,VA
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While everything you wrote is true it is also true that mortgage rates are inching up making the ability to buy a house a little bit more difficult. Mortgage product guidleines are also getting stricter and stricter. So, if you qualify for a mortgage it's time to get with the program. Next year may be too late.