Part of my job as a Realtor is to keep my finger on the pulse of the market, which is critical in helping my clients to understand and determine when it’s the right time to buy, sell and/or make a move…
This week, as expected, the Feds raised short term rates another 25bps. The current Fed median estimates still show three rate hikes in 2019, one in 2020, and zero in 2021. They see the labor market as continuing to strengthen. Further, the Fed sees 2018 economic growth at 3.1%, up from 2.8% in June, but without any expected breakout in inflation. Seeing lots of green on the screens for a change. Mortgages are up 6 tics and the 10yr yield is down to 3.08%.
What does all this mean? Well, if this trend continues, we expect mortgage rates to continue to rise, which is a sign of a healthy economy. Especially as the Fed continues to selloff their existing bond position they purchased during the QE or stimulus days. And rising rates means a real and measured drop in a buyer’s purchasing power.
Courtesy of Sotheby's International Realty's in-house Lender Simon Atik, 310.880.8414, Simon.Atik@grarate.com, Vice President of Mortgage Lending, Guaranteed Rate Affinity.
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