News of the coronavirus is a constant in all mainstream media lately. Its impact is far reaching, not only as Americans and citizens of the world take precautions to stay healthy, but economically and on a global level. As a result, last Tuesday, the Federal Reserve made a decision to make a rate cut, in anticipation of recession concerns.
According to a Realtor Magazine article published last week, the rate cut was significant, the largest one time cut since 2008. The impact of this decision could, in time, affect the real estate markets. According to Lawrence Yun, chief economist at the National Association of Realtors, “The real estate sector will hold up very well because of the rate cut. Hesitant home buyers will be enticed to take advantage of low interest rates. Commercial property prices will rise due to higher returns that can be had from the bond market after adjusting for risks.”
Some experts believe that rates which are now averaging 3.45% could drop even lower before the economy rebounds from the effects of coronavirus. Mortgage rates low as 3% have not been ruled out by Rick Sharga, president and CEO or CJ Patrick Company.
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Photo Credit Sergio Santos