As the Fed continues to wind down its quantitative easing program, investors are beginning to worry about when the impending rate hike will occur. Well, last weeks Fed’s two-day meeting reassured the public that although labor markets are gaining strength, there’s still plenty of room for improvement. The Fed reduced their purchases of mortgage-backed securities and government bonds by $10 billion to $15 billion, with plans to totally wind the purchases down at their October 28-29 meeting. According to Fed Chairman Janet Yellen, “There are too many people who want jobs who can’t find them.” The jobless rate has fallen over one percent in the last year to just over six percent, and estimates call for under six percent by year-end. With this in mind, the Fed reaffirmed its commitment to keeping its benchmark short-term rate near zero for “a considerable time” into the future.
The fact that rates will remain low, likely until mid-2015 according to most economists’ estimates, keeps the cost to borrow at historically low levels. This means that for those thinking about buying, or refinancing, now is as good a time as ever to lock in these low rates. With consumers keeping in mind that borrowing will become more expensive in the coming year, we may see an uptick in real estate sales over the course of the winter and into the spring. If you’re considering Miami real estate or investments and what types of financing may be available, please contact a RE/MAX agent today!