Rates Should be Flat for Majority of 2019
The Fed announced last week they do not expect to raise any interest rates for the remainder of 2019. Good news for us here locally in Costa Mesa, and a decision that should help both buyers and sellers in Costa Mesa this year.
Federal Reserve Chair Powell announced last week that he felt rates were fine and that the economy was in a good place that did not need further upward correction with interest rates.
If you happened to read our January post for Costa Mesa Real Estate Predictions, then you know I was RIGHT!!! (1 out of 10 so far, I will take it!!). Contrary to popular belief, the consensus was that the Fed would likely raise rates 2 times this year. I thought differently. I felt that with everything swirling around the President at this point with the special investigations into election fraud, meddling, Russia, etc., that it would be really tough to double down and continue to raise rates. I do feel that the economy is in a sensitive place and could largely be effected by rate changes – especially real estate. Real estate has been overheated for some time, and we have had at least 7 years now of rising prices.
No Rate Change Should Help Costa Mesa Real Estate
Hopefully the rates stay where they are at now – around 4.25% for a 30 year fixed mortgage- and continue to hold around that point. That will help sellers in Costa Mesa real estate by being able to command around the same price points of recent sales, so long as the inventory remains as thin as it is now. Any spike in inventory will still reduce prices though, regardless of rates remaining unchanged.
For Buyers, hopefully the 4.25% interest rate being unchanged gives them time to look around and make a good decision. When we had the last interest rate hike in the fall of 2018, buying seemed to stop overnight. So the buyer market is very delicate to prices right now. Prices will only get better if inventory increases, so I would tell Costa Mesa real estate buyers to jump if they see the right fit on a home, and wait if they don’t see the right one.
Interest rates being in the same spot this year should help!
If you need help with any Costa Mesa real estate, Broker Colin Delaney has been helloing buyers and sellers in Costa Mesa for more than 16 years.