With the Super Bowl now concluded and New England crowned NFL world champs, concern over low air pressure in footballs will rapidly retreat from our consciousness. Concern over whether and when low mortgage rates will rise however, should never retreat in our minds and should always remain front and center.
The Federal Reserve Board's minutes released after the December 2014 meeting indicated that the Fed would wait at least two meetings before raising rates. Its inclusion in that statement means the Fed does not intend to act at its meetings in March or April. The December language appears to us to put the focus on the Fed's meeting in June for a possible raise in rates.
Fed officials have long pointed to that June meeting as the most likely date for a first rate increase, and some analysts continue to regard that as a good bet. In their statement released last week, the Federal Reserve and its chairwoman, Janet Yellen again kept its options open, signaling that it would not raise short-term interest rates any earlier than June.
Just as the Fed statements are beginning to sound repetitive, so too am I when I tell you that smart buyers and sellers will move quickly this year while interest rates, not unlike the AFC playoff footballs, remain somewhat deflated. Thirty-year fixed rate loans are running at approximately 3.65%. If rates were to rise to 5% before you make your move, you would end up paying an additional $57,000 in interest over the life of a $200,000 loan...that's a tidy sum that could otherwise be put into an IRA for early retirement or pay for a child's college tuition.
Don't be caught short. The Super Bowl is over and the real estate market in Dane County is wide open for business. Give me a call to see if I can help!
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