Last week, the US House approved a bill which will effectively audit the Federal Reserve. Since its creation, the Fed enjoyed freedom from oversight and no restrictions on decisions meetings except for senate hearings. In the aftermath, worldwide confidence in the US dollar rose devaluing the euro. This in turn gave the US dollar more purchasing power. Moreover, the US congress has approved first time home buyer tax credit of up to $8000 and awarded existing homeowners a $6500 tax credit if they owned their property for at least 5 years.
In the world of real estate, such actions carry different effects. Local mortgage rates experienced a limited hike in rates as the average 30 years fixed rate rose by 0.01% to 5.04%. This is a sign of confidence in a returning real estate market in the US because the hike is accredited with an increase in demand from consumers in both purchases and refinancing financial products. At the same time, according to California Association of Realtors, there is a high demand for single family residence in regards to full arm length transactions.
On the nation level, there has been a growing shift from city centered to urban areas. People have been seeking homes in areas with low traffic and away from city pollution, causing a simple hike in urban areas prices. At the same time, rents for mid city properties deflated. This was also triggered by change of employment patterns as jobs becoming more locally concentrated and service directed.
How about the average home buyer, how can he/she benefit from such upheaval? It is one of the best times to make your purchase. If the dream of real estate ownership has been taunting you, current market conditions are fertile. Existing mortgage rates are still at all times low. Home values are very reflective of location, durability, and workmanship. In addition, the US federal government is offering multiple tax incentives. As for lenders, they are more willing to help willing and able consumers.