Potential homebuyers have something to be happy about. If you are a potential homebuyer, you will be pleased to know that the mortgage rates have declined once again. Yes, mortgage rates have been falling slightly for the past three weeks and may fall further.
Recent data coming out among mortgage rates indicate that thirty-year fixed rates declined by 2 basis points to its current level of 2.88%. Potential homebuyers that are tuned to the interest rates will notice that the 30 year mortgage rate has only gone up once since April.
Again, it may be an opportune time to purchase real estate for your primary residence needs or as an investment. While rates may trend down a little more in the future, these current rates present a great opportunity for prudent homebuyers.
We are seeing this revision in interest rates due to the larger economic situation in the United States.
The Economic Picture in the United States
Individuals would notice quite a bit of economic data coming out of different reports over the past couple of weeks. Many potential homebuyers are watching and waiting to see important data. The critical data that many homebuyers are paying attention to is that of inflation. For instance, consumer inflation and wholesale inflation matters to homebuyers.
The reason why it is important is because homebuyers will want to defend against inflation. One way to protect your assets and your portfolio against inflation is by purchasing real estate.
It is essential to note that the data on consumer and wholesale inflation has moved upward. That is correct and it has not trended downward. This is concerning to many individuals and it makes sense. Individuals want to make sure that they are protecting their assets. As such, more individuals are looking at strategic ways to purchase real estate. This way, they can protect themselves if inflation were to heat up much more.
They are already seeing risky assets and their respective valuations correct due to inflation fears. If one were to look at recent high flying stocks that range from GME to AMC, they have fallen to almost half their previous price.
The Federal Reserve and Janet Yellen Cautions on Inflation
Prudent investors and homebuyers are looking into their portfolio and making sure to watch out for current FED policy moves. They are also paying attention to the current economic data and how it will move in the future as well.
Again, troubling statistics and data points like the yearly rate of inflation quickly moving from five percent to five and a half percent is troubling. Individuals notice that the core yearly rate of inflation has also amplified to 4.5%.
But investors can be certain that the Federal Reserve will not act with regard to inflation fears. The chairman of the Federal Reserve notes that it will let inflation run hot in the short term and leave the markets as it is. The reasoning behind this decision making process is that it wants to avoid potential errors in policy.
All of these factors, in addition to others, contributed to the decline in interest rates and yields.
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