So the Federal reserve is following through based upon economic numbers regarding raising interest rates! Let's take a few moments and examine what does that really mean to you and I. Let's take another moment and examine what that means YOU should do with your own real estate portfolio.
Federal reserve raising interest rates does not mean we see a significant jump in the rates you and I pay for things right away. It actually means the amount of money a large institution or Wall Street, or banks pay the federal reserve to use their money is higher. This will mean higher rates at some point to you and I. The biggest thing to know is this rate move WAS EXPECTED so it is already factored into the market. The BIG picture is the verbiage and TREND of the Fed. The trend, the suggestion and expectation is the FED will CONTINUE to raise rates. THAT WILL EFFECT the rate of money you and I pay to borrow for everything. Loans, cars, credit cards you name it our rates will increase so that being said what should you do now?
- Buyers- Note what is short term is happening, is prices for homes are still rising or staying the same. Why you should ask? Biggest reason is in the markets I work there is still dramatically less homes for sale and more people looking to purchase homes. That is and will continue to keep prices up and moving up for the foreseeable future. If I am correct rates and prices rise OR stay the same, your monthly obiligation to own will increase so purchasing NOW really really really should be your focus in my opinion.
- Sellers- Short term for you. In my opinion you are in control because buyers are looking to get in BUT there will come a point if rates continue to rise that less people will be able to afford or qualify for homes. That will mean homes will not sell as fast which means more homes come to the market and buyers have more options. That wil put pressure on pricing and sellers NEEDING sell for whatever reason will do what they need to do to get their homes under contract and close.