The Fed Move Today
We have low rates now but not for long. This is because the Fed is going to begin an aggressive tapering next year. So while they’ve kept rates low today, rates will surely rise next year. Chairman Powell said that he expects 3 rate hikes next year. Inflation is now seen as persistent and as a serious threat to the economy. This is why the Fed is acting aggressively.
Economists welcomed the Fed’s announcements today. So did the stock market which soared nearly 400 points. I’ve heard and read in the financial media a lot of frustration about this. Opinions voiced concern about the Fed’s seeing inflation as transitory and not persistent. Calling inflation persistent and acting aggressively to combat it was very good news.
How is this going to affect the real estate market?
I am suggesting that you take a strategic approach to real estate. Consider your options regarding the Fed move today and what it’s forecasting for the future.
Current Homeowners
Does it make sense to re-finance but you put it on the back burner? Don’t. Calculate carefully to figure out if refinancing makes sense now. If it does, then get it done while rates are low.
Home Buyers
It’s no secret – higher rates mean higher monthly payments. When the market corrects (and it will at some point), it’s a very safe bet that rates will be so much higher that they’ll more than offset whatever reduction occurs. Try to buy a house sooner in 2022 than you might have planned.
Understand that you will be facing stiff competition from other home buyers who are likewise worried about rising rates. Don’t shortchange yourself – get properly prepared. What is that? A fully pre-approved mortgage loan; one that’s gone through the 1st round of underwriting. Please don’t do that 15 minute thing. It’s worthless to a smart listing agent.
Sellers
Get your home on the market right after the holidays and I mean very early January. Did anyone tell you how much lower the inventory is now? 915 homes on the market for sale in the New Jersey Multiple Listing Service for Bergen County. This is now way less than half what it should be for this time of year.
Why would you wait until April or May when rates will be rising and you’ll have so much more competition? Here’s what I hear – I want the flowers to be blooming and the grass to be green. Do you really think that buyers desperate to get a mortgage before it’s 1-1.5% higher care about this? Get your home listed ASAP.
Low Rates Now But Not For Long
It’s low rates now but not for long. I’ve been warning you about this for weeks and months. It’s here now. The Fed has spoken and because you’re facing it, you must act to protect yourself. This is why the tone of my blog article is so direct (in other words a bit less than politely diplomatic). I want you to understand the urgency of this situation for those who can act now.
Let’s say you can’t do anything now or in the very near future. Well, don’t lose any sleep over this. There are home sales in every real estate market. It’s simply because those who can do something now, really should. The rest of us will maneuver through the market when the time is right for us.
