It's official. After months of suggestions and debate, the Federal Reserve has increased the key interest rate from a range between 0.0% and 0.25% to between 0.25% and 0.50%. This comes on the heels of seven long years that have seen that key interest rate stagnant at a range of zero to a quarter of a percent. Ever since the Great Recession in 2008, the interest rate at which financial institutions borrow money has been incredibly low in order to promote stability and encourage lending (and borrowing) ina culture reeling from the devastating impact of far too many speculative loans.
The Federal Reserve must walk a fine line when establishing interest rates, which have a very real impact on the economy of the United States. If the interest rate isn't adjusted with a careful eye to growth, the very real danger of inflation looms its ugly head. If it gets too high, too fast, it can stagnate growth. Now that the economy has re-stabilized, the Federal Reserve is taking steps to ensure inflation won't be an issue in the near future, by putting an official end to the eight year zero-interest rate policy.
For the vast majority of homeowners or those considering purchasing a home in the near future, this tiny increase of a quarter of a percentage point will not have any dramatic impact on the monthly cost of their mortgage. Most pending homeowners will not be put off by this modest increase. However, considering that the Federal Reserve intends to slowly increase that interest rate over the next three years to as much as three percent, the difference in interest could prove to increase substantially for those still putting off purchasing a home.
That means that right now, with interest rates still hugging all-time lows, is a great time to look into buying a home, whether as your own residence or as a long-term financial investment. It also means that the near future should continue to be a great time to list a property for sale, as there continues to be strong demand and relatively low stock of houses on the market. The West Michigan real estate market and the Grand Rapids real estate market will likely see minimal, if any, slow down as the result of this modest increase in interest rates at the federal level.
In order to get the most of your real estate transaction, whether you are buying or selling, you should make a point to get in touch with the experienced, professional staff at Pyxis Realty. Always ready to do what it takes to find their clients the perfect home (or get their home in the sights of the perfect buyers), the Pyxis Realty staff will make taking advantage of this hard-earned economic upswing as simple as contacting our staff, listing your property (or viewing some properties), and showing up for the closing. All of the paperwork, legwork, and stress can be handled by our professional realtors, freeing you up to make moving plans or just to focus on the holidays.