Hurricanes Harvey And Irma Affect Interest Rates

We expected more than one interest rate hike in 2017 but according to CNBC that may not happen due to Hurricanes Harvey and Irma.

Big Banking institutions like Goldman Sachs and Bank of America-Merryll Lynch have reduced their growth projections as a result of Hurricane Harvey’s devastation on Texas and Louisiana. The insurance industry is obviously impacted too. Losses are expected to be $40 billion from Irma and $20 Billion from Harvey. The economic disruptions caused by back-to-back hurricanes are likely to seal the deal for the Federal Reserve to hold interest rates intact for the end of the year, according to the experts.

The Fed has approved two hikes in interest rates so far this year, the first in March and the second in June. They had predicted another hike but several factors besides the impact of hurricanes stood in the way. Foremost is the uncertainty over who the next Fed Chairman will be. That uncertainty tends to bring about a wait-and-see attitude in regards rates.

New York Fed President William Dudley did say rebuilding efforts following the storms will boost economic activity in the long run. With a boost in economic activity interest rates will again start moving upwards.

What This Means For Real Estate

So what does all this mean in regards Real Estate. It means good news for Home Buyers with mortgage rates continuing at historic lows at least until the end of the year.

Anyone who is thinking of buying should get the process started now and use this window to lock in a lower mortgage rate. I have just added home search to my website so you can now look for a new home with real time data. See what’s available and give me a call at 562-544-0449 or contact me here. I will be happy to fast track you to your new home before rates go up.