The recent presidential election has evoked much emotion and speculation in many arenas including the real estate market. The question of historically low interest rates continuing seems to be on many people’s minds.
Was that question answered with the recent rate hike by the recent Federal Reserve short-term hike rate of .25 percent? Not necessarily.
Many factors will come into play in the following year to determine where interest rates will fall.
It’s difficult to predict what the president-elect will do once in office. Several scenarios could affect interest rates.
- If President-Elect Trump cuts taxes and increases sending on the infrastructure, it could result in a higher-deficit. A higher-deficit would result in more bonds issued, a lower market price and an increase in interest rates.
- Another possibility would be buying back American debt at a lower rate. This move would be one step short of default. Although, Trump floated this idea during the election, he has since backed off of it. If he took this unprecedented step, then foreign investors would consider American bonds risky, which again could cause interest rates to rise.
- On the upside, if the economy improves under the next administration, Joe Mellman, vice president and mortgage line of business leader at TransUnion, believes there will be a great influx of first-time homeowners into the real estate market which should drive down interest rates.
If you do decide this is the right time to buy a home or to refinance, don’t forget to shop around for your title company. Getting an estimate from an independent title company like Property Title & Escrow, LLC can save you hundreds of dollars on the purchase or refinance of your home.
Remember, the consumer has the right to choose their title company. Choose an independent company like Property Title to get the best service and save the most money on your transaction.
Contact Eric N. Lamb, Esq. today, 410-594-7474.