Real Estate Expected To Heat Up After Increase In Interest Rates

1
Real Estate Expected To Heat Up After Increase In
Interest Rates
2
Real Estate Interest Rates
The Federal Reserve, otherwise known as the Feds,
has recently made their first interest hike in
almost a decade. This ultimately means that real
estate is in the limelight, as their sales are
going to increase. Additionally, this means that
the Feds must be confident in the economy, as job
growth must also be a key reason for raising the
rates. Real estate interest rates have become a
hot topic. During the Financial Crisis, which
took place in 2008, and the plummet of the real
estate market, the Federal Reserve had no other
option but to drop interest rates to a severely
low percentage. Now that they are increasing the
rates, it will be affecting North Virginias real
estate market and encouraging many to keep their
eyes peeled. Real estate investors believe now is
the hottest time to sell, as the increase in
rates will create lots of buyers who are
desperate to purchase before the rates get
tackled by another increase.
3
Mike Putnam, North Virginia real estate agent,
believes people are going to rush before the
rates go even higher. He states Since the rate
hike last week, we are already getting an
increase in the number of calls from those
interested in purchasing a home in Northern
Virginia, so there is no question this increase
is starting to create urgency for those who have
been on the side lines. Officials from the Fed
have commented on their strong position, as they
feel the economy is strong enough to keep growing
with a little less help from the Central Bank.
Moreover, real estate investors believe that they
will gain a better return from their investment,
which will, in turn, leave them in a better
position. But they are not the only ones who have
responded so quickly to the news the banks ears
have been burning. Wells Fargo, a world power in
banking, became the first to advance their prime
lending rates due to the recent increase.
4
Subsequently, the interest rates affect the
accessibility and convenience of capital as well
as the demand for investment. These capital flows
impact the supply and demand aspect for
properties, which inevitably affects the property
prices. The interest rates will affect the
returns on substitute investments and price
change in order to keep up with the inherent
risks within the real estate sector. During the
destabilization periods in the credit market, the
required rates of return for Real Estate also
change, which means that investors who anticipate
such increase in future rates will allow an
increase in risk and risk premium as well, as an
increase on downward pressure on property
prices. In addition, the short-term increase in
interest shows confidence in the economy without
having influence directly on mortgage rates.
However, in the long-term, those mortgage rates
and borrowing rates will increase, so it is best
for people to get in there before it happens.
Change the Color of any of these layouts to fit
your company or personal preference. Go to the
Design tab up top and choose COLORS under the tab
on the upper right or you may have to open or
click on a drop down in the Design tab to the far
right, it may be labeled Varients, that will
bring up the COLORS tab. You can customize the
COLORS as well to get the exact color scheme you
want.
5

• Website http//michaelputnam.com/
• Michael Putnam
• info_at_michaelputnam.com
• 703-928-6514
• Source
• http//michaelputnam.com/news-real-estate-expected
  -to-heat-up-after-increase-in-interest-rates/