How Rising Interest Rates Will Impact 2017
As was largely anticipated, the Federal Reserve voted at its December meeting to raise interest rates by one-quarter of a percentage point, putting rates at 0.75 percent for the new year. This decision is set to kick off a series of short-term interest rate hikes over the next 12 months. So, what will these climbing numbers mean for the South Florida real estate market?
Not All Bad News
While this might not seem like good news at first glance, the vote is actually promising for the market — to a point, that is. The initial increase will not significantly impact most homeowners, and these new rates are still set relatively low for prospective buyers. Only the second increase made in more than eight years, the change is reflective of a strong economy. Assuming jobs grow as projected over the course of the year, the subsequent hikes may not be as detrimental to the market as some might fear.
Key Concerns for Buyers, Sellers & Real Estate Professionals
With that said, there are still some potential impacts that those entering the market and working in the industry need to keep top of mind. For starters, individuals planning to buy in 2017 could benefit from starting their home search sooner rather than later. Homeowners can save money by making their purchase before interest rates rise again (as they almost certainly will), as mortgage rates undoubtedly rise along with them. In fact, mortgage rates have already started a climb upward, jumping up to 4 percent post-election. As the Federal Reserve continues to move its numbers higher, mortgage rates will mirror it. For sellers and industry professionals, it will be important to monitor the upcoming meetings for those predicted increases, as they are likely to slow down an already slowing market.
At Stein Posner, our South Florida real estate professionals are always on top of the latest industry news, so that we may provide only the best service to our clients. If you have questions about buying or selling a South Florida home, give us a call today!