Thursday, June 16, 2022 / by Ira Miskin
YESTERDAY the Fed raised short term interest rates by 3/4 of a percentage point. The stock market bubbled up... down... the news media worried... and real estate agents whined about how this will affect their sales... or not.
Mortgage interest rates have risen sharply in the last year. Today some loans could finance for over 6%. That certainly has impact on buyers who must be careful about the monthly mortgage payment. It will have impact on homesellers too, as fewer buyers will qualify for loans for homes selling at record high prices... which likely means price increases will slow.
Residential real estate pricing, like most commodities in our economy is guided by the principle of supply and demand. Low supply, high demand... higher prices. When demand drops and supply is greater, prices cease to rise - to meet market demand.
And mortgage interest rates, although certainly affected by the economy, are actually not tied to short term rates dictated by the Fed, but to Treasury Bond yields. Yes borrowing money is somewhat complex.
Yet beyond the impact the economy, or politics, or international wars and more may have on the global and local economy, buying real estate, no matter the market conditions, has been, and remains among the best and most stable investment vehicles open to nearly everyone.
Are you thinking of buying or selling? Are you considering how to invest in today's economy in real estate? Call us direct at 770-672-7832 to learn more.