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Federal Reserve and Interest Rates for Real Estate

Federal Reserve to Remain Patient on Interest Rate

Federal Reserve to Remain Patient on Interest Rate
The Federal Reserve released their most recent press release statement on May 22nd, and there are a few takeaways that I wanted to share with you that can help you make an educated decision regarding selling or buying real estate:
  1. The labor market remains strong.
  2. Economic activity rose at a solid rate.
  3. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.
  4. Growth of household spending and business fixed investment slowed in the first quarter of the year. Generaly speaking, more people are getting ready for retirement and are bearish with their spendings, as well as the younger generation is moving towards stronger money saving behavior for a downpayment or paying off their studen loans.
As the Fed's goal is to stay consistant with it's statutory mandate of seeking to foster maximum employment rates and price stability, in support of the goal, the Fed's decided to maintain the target range of the federal funds rate at 2-1/4 to 2-1/2 percent.
 The federal reserve continues to project sustained expansion of economic activity, strong labor market conditions, and inflation rates that are near the Federal Reserve's symmetric 2 percent objective as the most likely outcome.
How the federal reserve's statement affects your decision to either buy or sell a home is, of course, something I view and review very carefully, as Real Estate is about location, neighborhood activity, and the interior condition of the proeprty. However, knowing that we are in a reletavelly strong and healthy market does reinforce that despite an increase in days-on-market of listings, in Orange County and surrounding areas, the market is doing well, and depending on where you buy or sell, the buyer and seller markets are experiencing an equilibrium.
Lastly, as you may already know if the Fed's are more patient with their interest rates, it means that your lender/bank is also, more patient with their interest rates. If you're considering buying a home, take advantage of this scenario. If you're considering selling your home, allow me to value analize your investment to calculate it's true market value.