You have probably noticed that interest rates and mortgage rates have been very low lately. This is because the Federal Reserve has kept key interest rates at almost zero since December 2008.
If you are like bankrate.com and some economists
, you may worry that these low rates will come back to bite us in the near future. They worry that policymakers and the Federal Reserve have kept interest rates so low for so long that they are just asking for a financial crisis.
However, this is actually not all doom and gloom. Both the National Association of Realtors® Chief Economist Lawrence Yun and the chief economist at the National Association of Home Builders, David Crowe, do not think these low interest rates will result in harm.
“[The Fed] needed to get the economy going before everything else, and the zero interest rate policy accomplished that,” Yun told Bankrate.com. “The asset price increase in home prices could have been relieved with increased housing starts, but that is outside of the Fed’s purview.”
The optimism of these two chief economists should come as comforting.
“A weak recovery is a closer danger than runaway inflation,” Crowe said. “Current levels of continuing slack in the labor market point to a low inflation risk.”
However, there are still those economists who worry, especially because the Fed is expected to finally raise rates this month.
“People now believe the current levels of rates are normal rates and value any changes as slowing the economy rather than easing up on the gas pedal,” says Joel Naroff, president of Naroff Economic Advisors. “Think of housing, where people say a 5 percent mortgage rate would ‘crush’ the housing market.”
Until the Fed actually raises rates, is it tough to know what will happen to the economy in the future.
It may be in your best interest to wait no longer to buy the home you’ve been eyeing in Miami. Check out all the amazing properties RE/MAX Properties has to offer, and contact an agent today!