Today, in just a few hours, the Federal Reserve and its Chairman , Ben Bernanke, are expected to leave interest rates unchanged after seven straight rate cuts that it instituted in an effort to keep the Real Estate market from dragging our country and overall economy into a recession
However, just hours ago, we saw the announcement of sales of new homes down for the sixth time in seven months in May and median prices down across the country; especially in the West and here in Metro Phoenix where new home sales were down the most in the country, falling by 11.6 percent.
While the FED leaves reates unchanged. Actual Treasury (bond) rates, the rates that affect long-term mortgage rates continue to rise; further causing a strain on housing as those hoping to buy or Re-Finance a home are being priced out of the opportunity.
Lewis Corcoran, points out , "We can never expect people to buy homes simply because, as the (NAR)National Association of Realtors keeps saying and has been saying for 2 years now: "now is a great time to buy a home." as we do not know for sure when and where the bottom will be found.
Now, according to some economists, the high "inventories may cause home prices will to keep falling until the spring of next year".
However, with interest rates rising, and prices dropping , we may be approaching the actual bottom of housing. Since further price drops are partly off set by rising interest rate. The price of housing may be going down. However, your payments for the same house are going up as rixed mortgage rates rise.
If you add in the use of the home, tax benefits, and the lower fixed mortgage payment as a hedge against inflation, we may be at or near a bottom in terms of 'affordability' in housing.
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Copyright © 2008 By James Wexler, All Rights Reserved. *FED expected to leave interest rates unchanged*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs
