Back in December we wrote in Five Real Estate Trends for 2015: Mark Livingstone, a mortgage broker and president at Cornerstone First Financial in Washington, D.C., says he sees a prosperous 2015 ahead, and he plans to add to his staff of mortgage officers as a result. The key factor: Interest rates are going to stay low because of geopolitical unrest, and that will keep inflation in check, along with lower oil prices. That will translate into more buyers starting as soon as February.
That was one of the Five Real Estate Trends for 2015 Mortgage rates stay low. Daren Blomquist of RealtyTrac even says the industry is “addicted” to low rates.
Last week the Federal Open Market Committee (FOMC) announced that interest rates would remain where they were. “To be sure, there are good reasons to be concerned about this unprecedented run of low interest rates…” After the decision, this sobering observation was offered by Fannie Mae Chief Economist Doug Duncan: “By walking back its earlier statements, the Fed itself has become a source of uncertainty for the economy. Going forward, it will be difficult to take what it says, or rather signals, it will do on faith anymore. At this point, it is unclear what will move the Fed to begin a long process to normalization.”
Now the media would have you believe that December is the time for the Federal Reserve to raise interest rates. We are inclined to believe Ben Bernanke when he said rates would not be normalized in his lifetime.
Two things come to mind:
- In her press conference, Janet Yellen alluded to the idea that negative interest rates might be in our future. Meaning, instead of receiving some interest rate on your savings, you might be penalized for saving. Negative rates would force you to spend.
- As Michael A. Gayed, CFA at Pension Partner said “The real question is what in the world is so broken in the system which is preventing them from increasing rates on Sept 17?” Is the global economy so weak that a mere ¼% hike would send the world into a tizzy?
What to do? If you are looking to buy a house, have the 20% down payment required, have money set aside for emergencies and have debt paid down or have no debt, and you find the house of your dreams, then by all means, go for it. After all, over five million houses are sold each year at a minimum. You will be in good company.
If you are not in that position and if you need every bit of help available, including zero down, and the new lower FICO standards, then wait awhile until your finances are more secure. Too much leverage, without adequate backup savings, and you could get in big trouble if the economy turns down.
We specialize in buying properties from people who need to sell their house fast because of the threat of foreclosure, or just don’t want to pay those high realtor fees. We don’t want that to happen to you.
Trusted Homebuyers is here to help homeowners out of any kind of distressed situation. As investors, we are in business to make a modest profit on any deal, however we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Just the simple honest truth about your home and how we can help you sell it fast to resolve any situation.
Give us a call today to let us know what YOU need help with!