Should You Try to Time a Real Estate Purchase by Analyzing Current Rates?
A lot of people I speak to hear about the Federal rate cuts and presume that they should attempt to wait or “time” the purchase of a property. This is absolutely not the case with this most recent rate cut implemented by the Fed.
In the market we are in today, buyers cannot play games with waiting. The inventory is as low as it’s been in a long long time. You need to plan to do whatever you can do to get the house under agreement and stop deliberating over interest rate. A house comes on…a house goes off. It’s one for with 5 buyers behind you looking to buy that same house today. -Realtor® Michael Mahoney
Here is an excerpt from a New York Times article written by Ben Casselman of The New York Times
But with rates near record lows, it’s unlikely that many would-be buyers are on the sidelines awaiting a further cut. And if they are waiting, they might be disappointed — many economists say financial markets have already “priced in” Wednesday’s rate cut.
“I’m skeptical that rate cuts are going to have any noticeable impact on housing in the short-run,” said Ralph McLaughlin, deputy chief economist for CoreLogic, a real estate data provider.
There’s another catch: Mortgage rates are tied not to short-term rates, which the Fed directly controls, but instead to long-term rates, which partly reflect market expectations about the economy’s direction — long-term rates tend to rise when investors are more optimistic. So if the Fed’s policy achieves its broader aim, it can lead to higher mortgage rates.
That has already begun to happen. Mortgage rates have edged upward since September as fears about an imminent recession eased. Michael Fratantoni, chief economist of the Mortgage Bankers’ Association, said he expected rates to continue to rise gradually.
To see the most current mortgage rates check out rates @ Freddie Mac’s Web Site
If you are currently renting, now could not be a better time to make a purchase. Rates are so low, that you may be able to find a place for less than you pay your landlord.
When your Move Counts….Count on Mike
Areas covered by Michael include: Boston, Dedham, Milton, Dover, Westwood, Norwood, Medfield, Walpole, Sharon, Canton, Stoughton, Randolph, Avon, Norfolk, Wrentham, Franklin, Foxborough, Mansfield, Plainville, Medway, Millis, Sherborn, Holliston