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Last week the Chairman for the Federal Reserve commented on the current economic climate, stressing that interest rates will be the "active tool" for combating the ever-growing inflation rate. If you're anything like me, you are so tired of hearing about "interest rates" and "inflation" and the "housing crash" etc. It kinda just feels like beating a dead horse a little bit at this point. I totally understand. So I won't be getting into any of this any deeper than how it affects the real estate world, simply because that's the extent of my expertise.
With that being said, this is important to note because, of course, raising interest rates means higher mortgage rates. I have been trying to bring light to this for the past year or so, the fact that interest rates are so low is what is simply making right now such a great time to purchase real estate. Just a couple years ago rates were around 5 or 6 percent. Today we're in the 3's and over the past 12-24 months we've seen rates in the 2's. This costs you hundreds of dollars more in your monthly payments and HUNDREDS of thousands more in interest over the life of the loan.
If that's not a reason to buy now and not wait then I don't know what is. Rates can't go much lower folks. And now we're getting word from the Fed Chairman that "there’s quite a bit of room to raise interest rates without threatening the labor market." The article speculates a 1/4% hike in March most likely with more to come each time the Fed meets this year.
I don't share this to scare anyone, just to inform you with as much info as possible because knowledge is power and I want you to be able to make strong, educated decisions for yourself. God bless!
-Zach Burnham
#RealValueRealtor
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