A big thank you to John Meussner with Mason-McDuffie Mortgage, an amazing lender that I met years ago on Active Rain and have had several great interactions. I realized that you can teach an old dog new tricks because I learned so much from John about Federal Rate Hikes and mortgage interest rates!
December is over, but December did have several Federal Rate Hikes! After all the commentary, rates actually improved! We have seen rates go from the 8's at their worst back in October down to the mid to low 6's! Which means more buying power for Buyers!
There's a huge misconception that the Fed raises mortgage rates - they do NOT! In realty, mortgage rates often move in the opposite direction of Federal Funds rates. The Fed changes the rate that banks borrow from each other. This DOES pressure rates up, BUT . . . it also typically causes a recessionary environment and slows inflation, which ends up forcing mortgage rates DOWN!
The realty is, rates have improved a lot since the Fed started raising rates! 2021 is shaping up to a year where real estate will be very local. Almost every market under the sun saw a steep appreciation in the last few years. John said home prices will go up about 4% over the next year, following 10% year over year gains to date. 14% over 2 years is more than my retirement accounts!
Real Estate is really a good bet for those concerned about getting a return on investment. If rates continue to trend lower in the tight inventory market, 2023 could be one of the best bets out there for real estate!