Last week, the Federal Reserve met and made a much-anticipated decision to not raise the federal funds rate this month. They reasoned that the economy is still falling short of benchmarks. This decisions means home-buyers can continue to take advantage of lower mortgage rates.
On Wednesday, the Federal Open Markets Committee released a statement saying, “support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current zero to one-quarter percentage target rate for the federal funds rate remains appropriate.”
In December, the FOMC may reconsider a rate hike again at their next meeting. The last time they raised rates was June 2006.
“The Fed sent its clearest signal yet that, pending decent data, it has the December meeting in its sights for the first rate hike,” Michael Feroli, an economist at JPMorgan Chase and a former Fed staffer, told the Associated Press.
Earlier last week, chief economist for realtor.com, Jonathan Smoke, predicted that a hike was unlikely.
“The new home sales report covering September shows a rate well below the consensus estimate and indicates that real issues emerged late this summer in the new homes market, questioning the supposedly strong growth signals that were previously interpreted by many,” Smoke said. “Last year we picked up momentum in the late summer and fall. This year seems to be the opposite – we are losing momentum.”
Pending and existing-home sales also dropped in August. Smoke also said this could have influenced the Fed’s decision.
“That decline was likely a result of the stock market declines in August and September,” he said. “If builders are not focusing on first-time buyers, they are focusing on the segments most likely to be disrupted by declines in stock portfolios and retirement plans.”
Take advantage of the now as the fed keeps interest rates low and act now on that house you’ve been eyeing in Miami! Contact a RE/MAX Paradise agent today to look at our properties.