The much anticipated Fed Rate drop happened on July 31st, 2019.
As a Northern Virginia Realtor in Fairfax & Loudoun county, many of my clients are wondering how it will impact our real estate market?
This will come as a surprise to scores of consumers who mistakenly believe the Fed's 0.25% rate cut equates to a 0.25% drop in ALL rates. The Fed only sets its own "Fed Funds Rate" which governs overnight lending between big banks. Unfortunately, the long term mortgage (30-year fix) does have a direct impact with the Fed's bank rate policy.
August is here!
Which means parents (like myself) have to send their kids off to college. With this comes their 1st college tuition bill. Fortunately, in the past few years, the Northern Virginia real estate market has seen a steady pace of appreciation. Many parents have tapped into their home equity to fund college tuition rather than kids borrowing high-interest rate loans. The Fed policy does impact the HELOCs or any short term loan including your car payments and credit rates. The rise in the mortgage application is a common trend we see in August.
Even though Fed policy won't impact directly it is a psychological impact on the real estate industry. This tends to increase the number of buyers who are on the fence with their purchase decision. This surge comes around the same time when our empty nesters are ready to sell their nest (home) and move to a warmer temperature area. We will see a slight rise in our fall inventory.
The combination of low rates, a surge in the inventory and everyone back from their summer trip will influence our fall housing market across Northern Virginia. Which also is known as a second spring market in our region.
Continuing my saga about interest rates are lower than in past years/months ago. Strong high-income employment and a large volume of relo from both government and non-government entities have always been the drive behind demand in the Fairfax & Loudoun County Virginia.
Have a question about the local housing market in Fairfax or Loudoun county? Please feel free to contact me at 703-625-4949.
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