By now you have heard the news (and if not - Jason is going to spill it below!). But what does the latest Fed move mean for you, how can it be 'good' news...and did rates actually drop in response?!
First - thank you Jason for taking one for the team and getting in front of the camera! (We've been working on releasing weekly videos on our Facebook page to deliver the latest market data quickly and easily, so be sure to follow our Facebook page, Homes of Silicon Valley, to catch us when we are in front of the camera rather than behind the real estate scene - it DOES happen!). The widely-expected announcement of a rate hike by 0.25% is the un-surprising decision that followed two days of Federal Reserve policy-maker meetings. Why the first non-December rate hike in recent history and why now? Chairwoman Janet Yellen says it's really NOT complicated: it's a "simple message" to consumers that the economy is "doing well." In addition, the move is designed to keep up with the now optimal pace of inflation, currently rising at 2% annually after a few sluggish years.
Is there more good news? Yes! First, rates not only haven't skyrocketed, but actually dropped, as the financial markets have already accounted for this rate rise (and the future pace of projected ones) in their current interest rate offerings. Plus, the stock market surged to a record close after the DOW gained more than 100 points.
If you are in the process of buying a home - don't panic as your current rate may already reflect the news that was expected. If you are not locked, check in with your lender about any expected volatility or movement and what is best for you - but don't assume that this increase will stop your purchasing power in its tracks - yet.
That brings us to our next point; the rate rise might be slow and steady but lots of little movements DO add up. With future rate projections expected and home prices moving anywhere but down, your options could be more limited the longer you wait. If you are doing the buyer dance - it is time to quicken your step.
This translates to equally good news for sellers who already have the upper hand with low inventory, and now buyers who are eager to maximize their purchasing power. Not to mention the sun is shining which means that people are itching to hit open houses.
We hate to sound like Mary Poppins...but in real estate, a rate hike does NOT get much better than this so let us know if we can help achieve your buying, selling or investing goals right here in our favorite place...Silicon Valley! (Queue up lively music and cool umbrellas...)
Cheers,
Mark & Jason
