Interest Rates: The Wild Card
By Michael Ardolino, Broker-Owner, Realty Connect USA
Early September 2015
As The Wall Street Journal so aptly noted, “The Federal Reserve faces a potential cliffhanger about whether to raise rates” at its next meeting. All eyes were on the Fed on August 19 as it released the minutes of its July meeting, which revealed mixed signals. The uncertainty continues, and rates remain the wild card. Exhibit 1 illustrates the dramatic increases that Freddie Mac expects by the end of this year and into 2016.
In other real estate news:
- The median price for pending sales in Suffolk County increased by 3% in July over July 2014. For those who would like to see higher appreciation figures, keep in mind that modest, sustainable appreciation is what fosters a healthy market over the long haul.
- The number of sales (sales volume) in Suffolk increased by 10.9% in July over July 2014. This indicates pent-up demand, which is a good harbinger of fall sales activity
- Demand is also being fueled by intangible psychological factors. With the recession behind us, Potential buyers are ready to embrace the American Dream once again. Exhibit 2 illustrates that homeownership is back on top as the preferred long-term investment. Millennials aged 18-34, as fist-time buyers, are leading the charge. (See Exhibit 3.)
- Long Island recently posted its best employment stats since 2007, allowing more people the ability to enter the market.
I expect the busy pace of summer to continue into the fall. Sales prices, sales volume, and economic news are positive. To take advantage of the favorable market and still-low mortgage rates, which could soon become a thing of the past,
Please feel free to contact me @ 631-941-4300 or Michael@Ardolino.com
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