BREAKING NEWS: The Fed raise interest rates AGAIN!

For the fourth time in a row, we see a hike of ¾ of a percent and it’s the 6th time this year, we’ve seen the US central bank raise the benchmark short-term borrowing rate. 

So when does the correction end? Fed Chairman Jerome Powell is very focused on getting inflation back to 2%. It’s a bit like turning a cruise ship. In July we hit a high of 9%. We are now down to 8.2% so we are going in the right direction but the effort is full steam ahead to slow the economy.  We’re also tracking factors like the PCE or Personal Consumption Expenditure Price Index. A measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. When we stop the escalation of what we’re paying for goods and services - including housing - And normalize prices again, we bring inflation down.

But historically, we often stop the correction too soon, and then inflation lingers and it can throw us into a recession. Powell knows this. So while today’s rate hike is painful, it’s not a surprise. and if we keep making these corrections. There is a projection of getting back down to 2% by the early Spring of next year.  

So how does this affect real estate? Well, both buyers and sellers have an opportunity here. First- for sellers… if you remember back to April, May, June, and July.. we had a huge increase in inventory as sellers tried to sell at the height of the market. Inventory is now lower… so sellers there is less competition and it's a good time to get your house on the market. And buyers it’s a good time to buy despite the rates. Remember to date the rate and marry the house (rates will come back down when the economy gets back on track and you can refinance when that happens. In the meantime, use this opportunity to find your forever home when we’ve seen a little decrease in prices. Remember Arizona is different than most states. We have a huge influx of people moving here for jobs. So when consumer confidence comes back, will the market. Use this downturn to get the home you want. 

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