Monica's Corner: Will the Fed Raise Rates?
I am privileged to have a close working relationship with Monica Di Perna, mortgage broker at Guarantee Mortgage, who handles the financing on all my SFR and condo deals. With nearly 20 years in the industry, Monica brings a wealth of knowledge and experience to the table, and always keeps me informed and educated. In this, the first in a series of posts, she lends her insight and opinion on current market conditions.
As the US reviews economic data and we monitor the behavior of the Fed, more and more people are worrying about higher rates. The rumor is that the Fed will "taper" its bond and mortgage-backed securities by the end of the year, which will increase rates. I highly doubt that. In fact, I believe the 10 Year Note (the main indicator of where rates are) will actually fall lower because employment numbers are not better and because the US manufacturing index came in lower than expected. The Fed will NOT let rates go up if these two numbers have not improved; they simply will not let that happen. The Fed is powerful and has the ability to save a nation from the brink of the Depression -- as we witnessed. Rates will at least stay the same or fall further in the coming months. This means to the homeowner or the prospective buyer, get ready and make a move to purchase a home or refinance an existing home, with great rates. By next year, however, we may see higher rates because the affect of the Fed's activities will have the full impact. At that point, hopefully we will see higher rates because there is better employment numbers. Higher rates are good if the economy and the employment numbers head up as well.