It finally happened after a seven-year stall, the Feds raised the interest rates ever so slightly. The interest rates were lowered because the banks sought to revive the economy in the aftermath of the Great Recession. On Wednesday, December 16 2015, the Feds voted to “lift the short-term borrowing rate by a quarter-point to a range of .25% to .5%. The short-term rate had kept near zero for the past seven-years, making an unprecedented era in the history of the U.S. monetary policy triggered by the worst financial crisis and economic downturn since the 1930s”.
This new rate hike reflects the confidence in the U.S. economy and shows improvement in our country. Even though the rates will consistently go up, they will be gradual over the next several years. This rate hike will affect the Real Estate market in a few ways. It will urge buyers to purchase now and lock in a rate before they go up again. But since it is such a gradual increase, it will not inflate the market with buyers desperate for the lower interest rates. This change means the U.S. economy is doing better and will help make a correction in the Real Estate market where some prices were inflated. It will bring the market back to reality and help improve the health of the market and the economy.
If you are thinking of buying or selling your home contact The Anderson Estates team at (858) 245-9851. Serving all your Coastal San Diego Real Estate needs!