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When you are close to buying a new home in Bethany Beach, one news item that definitely becomes more interesting than usual is the status of current mortgage interest rates. All those little ads on the side of the screen that blink at you with Mortgage Interest Rate Alert! and Lock Lowest Home Interest Rate NOW! that you are accustomed to ignoring may also suddenly rate a second look—although you quickly learn that the promised Bethany Beachmortgage interest rate won’t be revealed unless you surrender a lot of personal info to the advertiser.
If you decide to avoid blabbing your email address to the internet (certain to put you onto yet another advertiser’s database), you probably do what I do—which is to check the legitimate news sources for their mortgage interest rate commentaries. When you do that, it’s reassuring when you find words and phrases like widely expected and as predicted (or even minor correction or following recent trends). When you are not quite ready to apply for your own mortgage, sudden interest rate lurches make budget projections less reliable.
So you would have expected it to have been reassuring when last week, as predicted, the Fed raised its Fed funds rate—the basic interest rate banks pay—by just a teense: a quarter of a point. Pretty much as had been widely expected. That may be an understatement; such a move had been thought imminent by many experts for years.
But last week’s Fed action didn’t quite follow through on the as predicted and widely expected fronts. Instead, we got words like ‘paradoxical’ (Mortgage News Daily); ‘fear mongering’ (CNN Money); ‘volatile’ (themortgagereports).
The good news for potential mortgage applicants was that the disarray the commentaries were describing had nothing to do with what homebuyers were likely to encounter. Instead, it described the problem the commentators were having explaining what the initial fed funds hike had caused: a slight fall in mortgage interest rates!
“Lenders easing up on home loans” and “Fed hike no biggie for mortgages” were stories from CNBC—and they were typical. “Mortgage Rates Slightly Lower Ahead of Holiday Week” was what Mortgage News Daily had found to be the paradoxical descent—eventually deciding it could be explained at the bond market level (traders had erred on the side of caution before the Fed’s announcement).
By Friday, loan originators were unanimous in suggesting that ‘today may be a good day to lock’ (but then again, to loan originators ‘today’ is always a good day to give them business). There was an underlying theme to most of the commentaries: expect a bounce in mortgage loan rates before too long. Probably, but not certainly—especially if you kept in mind Motley Fool’s “3 Predictions That Were Totally Wrong in 2015.” In addition to the Fed Funds rate and Treasury Note miscues, there was one we all would have shared: a barrel of crude oil ended the week priced at $40…about half of what the experts projected last January.
One fact that doesn’t involve any guesswork: by historical standards, today’s Bethany Beachmortgage interest rates remain in the ‘very low’ range. That means it’s still a good time for buyers and seller to give me a call! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.
This one was news to me. The Wall Street Journal had it buried in a ‘spread sheet’ section of their online Real Estate section: “Why It’s Harder to Sell Your Home in an Election Year.” If you are like me—never having had an inkling that Bethany Beach homes for sale have rough sledding in an election year (like this one)—you’d have to read the details.
“The uncertainty of a looming election can cause a dip in home sales,” it detailed, “especially if the race is close.” The article was illustrated by a cartoon showing a neighborhood street whose every lawn was graced by alternate “vote!” signs and homes for sale signs. The underlying thesis was that in close elections, house hunters are reluctant to buy if an uncertain political future makes them unsure about their own financial fortunes.
This might sound reasonable from a logic perspective, but as you read further into the factual basis for the idea, you’re likely to start losing confidence.
The whole basis for the article is a political science paper published in 2014.
In the British Journal of Political Science.
Based on housing sales back in 1999-2006.
In 73 elections.
Most of us would begin to worry about why this couldn’t make the grade in a United States journal of political science, since it centered on U.S. elections. Perhaps a research quality issue? Then there’s the fact that those dates are 10-17 years old. There is also the puzzling notion that there have been 73 elections in the past couple of decades…but it turns out that they are dealing with gubernatorial elections from a select number of states. Perhaps our average house hunter checking out homes for sale in Bethany Beach actually does hang their financial fortunes on who the next Governor is going to be…but I wouldn’t bet on it.
As for Presidential elections, the article mentions a separate analysis that “uncovered a similar effect.” But, on closer reading, not really. This analysis was by someone who studied California sales only, and determined that in the Golden State, home prices rose by an average of about 1% less during election years. But they still rose by 4.5% in those years. If that means they were “harder to sell,” you’d have to explain why…
This is only a guess, but if you were trying to determine if it will be easier or harder to find buyers for Bethany Beach homes for sale in Election Year 2016, it seems more logical to look for factors that directly affect the buyers—such as today’s historically low mortgage interest rates. When buyers do the arithmetic showing how low monthly payments have become, I’m willing to bet that overshadows errant thoughts about who the next Governor is going to be.
If you are readying to buy or sell a Bethany Beach home, you probably don’t really need to worry about who will occupy the Statehouse as much as who will be helping you navigate the market. I hope you’ll elect me for the job! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.