The real estate market may seem daunting at the moment, but experts say there is nothing to worry about.
As you may have heard, The Federal Reserve increased its short-term interest rates once again on June 13, making them 2%. This is the second rate hike of the year, and we are only halfway through it. While rates have increased once again, economists say there is no need to fret – the real estate market is doing well, despite these hikes.
American Chief Economist Mark Fleming has some news that may ease the stress that many buyers, sellers, and real estate professionals alike are feeling, in response to this recent rate increase: “If the 30-year, fixed-rate mortgage rate increases to 5 percent, which most economists agree is likely by the end of 2018 or early 2019, the impact on the market potential would be a modest decline to 6.10 million existing-home sales, according to the model.” To put it in simpler terms, these hikes will have little impact on the overall market.
In fact, these hikes could even be a good thing! – Yes, you read that correctly. Fleming offers even more words of wisdom in the following statement: “The Fed’s decision to raise rates for the sixth time in a year and a half was primarily viewed by experts as a reaction to the possibility of higher inflation due to continued improvement in the labor market and economy in general.”
So there you have it – no need to fear the interest increases. They could very well be the product of a thriving and bustling labor market and economy – and in the long run, that is much, much more important! We can all breathe a sigh of relief – and assure our buyers and sellers that these short-term hikes will not hinder any long-term decisions they want to make. It is all a product of the natural rise and fall of the real estate market, and of the economy as a whole.