Interest Rates to Remain Low

During its September meeting, the Federal Open Market Committee (FOMC) voted to keep interest rates between 0% - 0.25%, and all indications point to those rates staying there until at least 2023. These low rates are a reaction to the financial hit that the US economy has taken due to the Coronavirus Pandemic, and they are aimed at moving us back to a more prosperous economic environment.

As a realtor, when I hear anything about interest rates, my first thought is always about mortgages: how will this low Federal interest rate affect them? As you’d suspect, I have good news on that front – mortgage rates are staying low! Right now, 30 year fixed-rate mortgage rates are hovering under 3%, and this historically-low rate has proven to be a boon to the housing industry! With loans being so inexpensive, we have excited buyers ready to pounce on available inventory, particularly single family homes. I am always happy to sell homes, but the ramifications go beyond that, according to Forbes.com. “’The importance here is that the housing construction and sales markets are self-driving in that they spur additional new construction, labor build-up and new service-add ons,’ [says] Tom Stringfellow, president & chief investment officer at Frost Investment Advisors. ‘These include furniture sales, service industry growth, auto sales and a growing local tax base.’”

FOMC’s willingness to keep Federal interest rates low will keep real estate moving and will, I hope, bring our economy as a whole surging back to life, even amid a pandemic.