There was some great news released today by Federal Reserve Chairman, Jerome H. Powell. The Federal Reserve signaled that its plan to continue to raise rates in 2019 have been suspended. Jerome H. Powell said economic growth remained “solid” and the central bank expected growth to continue. This is a sharp reversal to the Federal Reserves stance on rates just six weeks ago.
“The case for raising rates has weakened somewhat,” Mr. Powell said, pointing to sluggish inflation, slowing growth in Europe and China, and the possibility of another federal government shutdown.
The Federal reserve leaving its benchmark interest rate unchanged was not a surprise. The big surprise was that they stated they may stay put for some time.
For the last several years, the Fed said consistently that it planned to keep raising interest rates. The pace was uncertain, but the direction was clear. Wednesday’s statement omitted previous language indicating that “some further gradual increases” would be warranted. Instead, it said the Fed would be “patient” in evaluating the health of the economy. And it suggested the Fed stood ready either to raise or to cut rates, depending on economic conditions.
What does this mean for the housing market? This is a great thing as rates greatly impact the buying power of a consumer. Since most consumers make their home purchase based off of desired payment this can have a big impact on buyers ability to get the home they want in the location they want. At a monthly payment of $3500, for every .25% the rates go down consumers will see an increase of $11,000 in buying power.
Being that we are still in a market with a low inventory and few houses for buyers to choose between having extra buying power can go a long way. It gives consumers more options and negotiating leverage. Be it shopping at a higher price point or using the additional buying power to ensure one is not be out by a better offer.
If you were previously in the market and priced out or if you have been on the fence in hope rates would come down a bit, now is the time to consult with a mortgage professional and find out what options you have.
Rates are a cyclical and unpredictable as stated by Brian Coulton, chief economist at Fitch Ratings, said he expected economic growth to continue and therefore he expected the Fed to resume rate increases this year. “This reads more like a pause than a strong signal that they believe that they are the end of the hiking cycle,” Mr. Coulton said. “Barring a very significant global downturn, we still see further rate increases later this year.”
So you want to make sure you empower yourself with knowledge by partnering with the right real estate and lending team, that way you know when time is right for you to make your purchase. If you are wondering what your options are feel free to contact the Ridge Real Estate Group and find out if now is a great time for you to buy or sell.
The Ridge Real Estate Group has been Building Relationships for Generations as your Real Estate Team throughout Contra Costa County. Steve and Debbie Ridge are Real Estate Brokers who started their journey about 30 years ago in Benicia. Their knowledge, expertise and reputation in the industry has created a name that lasts and empowered their very own daughter, Jessica Evans, to join the Ridge Real Estate Group and to take the company to the next level!
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Together, the Family Real Estate Company covers a multi generational wealth of knowledge! Debbie and Steve Ridge brings you years of experiences and the main core of real the Real Estate industry, while Jessica Evans brings you her extensive background in marketing and technology.
“Still the same, in one important sense, and that is this is a relationship business. That hasn’t changed. The technology absolutely, but the core is building relationships and working with people.” Steve Ridge
Jessica’s vision to grow the Ridge Real Estate group is a combination of keeping family traditions, while building a strong team with a reputable name for their clients throughout the Contra Costa County.
“I see the Ridge Real Estate Group as a reputable team in the industry. We don’t over promise and under deliver and we don’t disappear after the transaction. We build relationships with our clients for generations!” —Jessica Evans
To read more about Jessica Evans and the Ridge Real Estate Group Click here.
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Realtor | Ridge Real Estate Group
Berkshire Hathaway Drysdale Properties
Cell: 707.315.9803 | Team Line: 925.289.9709