In a competitive, inventory-constrained real estate market like we’ve seen this entire year in San Carlos, buyers are constantly reminded to “be patient and persistent” in their quest to find a place to live. For people who are not under the gun to find a new house, they’ve begrudgingly adopted this strategy since there’s simply not enough homes to go around. But the one fear in the back of every buyer’s mind is that if it takes too long to find a house, they’re going to lose out on the obscenely low interest rates that we’re enjoying right now.
Well, the Federal Reserve’s plan that was announced last week should sufficiently squash that fear..
Rates Low Through 2015
In a sweeping move to help stimulate the sluggish economic growth across the country, the Fed announced that it will spend $40 billion per month in mortgage-backed securities, and will keep interest rates at rock-bottom levels through mid-2015. This move may seem somewhat surprising on the surface to those of us who live in this separate universe known as Silicon Valley, where the freeways are jammed and high-tech jobs once again appear to be plentiful. But the rest of the country is not enjoying the wave of economic recovery that we’re experiencing here, so the move was deemed necessary.
This is great news for both buyers and sellers of real estate in San Carlos. The Fed’s move means that mortgage backed securities will once again be an very low risk investment, and that we’ll enjoy another 3 years (at least) of historically low mortgage interest rates. That should keep the fire stoked under the San Carlos real estate market for the foreseeable future.
Now, if there were only some houses to buy….
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