By Michael Ardolino, Broker-Owner, Realty Connect USA
Recent economic news indicates that if you are considering entering the market you should do so now. Here are some factors at work:
The Federal Reserve’s “tapering,” which has been expected for many mothers, has become a reality. This change in policy toward less stimulation of the economy is virtually guaranteed to result in higher interest rates. As rates increase, purchasing power erodes. (see Exhibit 1, which shows that roughly $2,000 per month pays a $400,000 load at 4.5% and only a $360,000 loan at 5.5%. This represents a 10% decrease in purchasing power.)
- The news from the Federal Reserve has made the global market a bit jittery. Possible effects on our local real estate market are unclear; it might be wise to be pro-active and proceed with any plants to sell or buy.
- Mortgage rates have risen about a full percentage point from the record lows of about a year ago. Recently, there was a small decrease, from 4.39% to 4.32% for the 30-year rate; this in no way indicates a trend. Experts expect rates to be another full point higher a year from now.
Sellers, take advantage of the pent-up demand, robust sales, and solid, sustainable growth that characterize our local market. Buyers. note that inventory is shrinking and affordability is decreasing, while both rates and prices are increasing. Why delay? If you are contemplating a real estate transaction, please feel free to contact me anytime:
Michael, 631-941-6262 or Michael@Ardolino.com
I’m always happy to share helpful real estate information, by publishing educational newsletters, speaking at real estate forums, and arming people with all the data they need to make confident, informed real estate decisions. For further details, visit my website at www.LongIslandHomeConnection.com.