How will the Debt Ceiling crisis and S & P Downgrade affect the Austin Real Estate market? Well, if you turn on the T.V., you would think the financial world is going to end and we will be going back to the bartering system before long. But looking past the media drama, what does this mean to Real Estate, especially Austin Real Estate?
The largest impact the experts predict will be with rising interest rates. The Washington Post explains it best. “The impact on your wallet from the downgrade is similar to what would happen if your own credit score declined: The cost of borrowing money is likely going to go up.”
The 10-year Treasury note is considered the basis for all other interest rates. And “the downgrade could increase the yields on those bonds, forcing the government to spend more to borrow the same amount of money,” the Washington Post article notes. “Many consumer loans, such as mortgages, are linked to the yield on Treasuries and therefore would also rise.”
So in the long run, it appears this credit mess in Washington will cause interest rates to increase, especially with credit cards, mortgages and car loans. But, in the meantime, with the stock market continuing to decline on a daily basis, interest rates continue to fall. As people take money out of stocks and put them into bonds, interest rates fall. Today, the average 30 year fixed interest rate is at 4.03%!! Let me say that again, 4.03%!
So what impact does the Downgrade have on the Austin real estate market? It is really difficult to know long term, but for now it remains an amazing opportunity to buy and take advantage of these incredible rates. We thought we saw the lowest rates we would ever see a few months back and now they are even lower. The Federal Reserve today said they are going to keep rates low for the next two years to help the economy recover, resulting in the 11th largest gain for the stock market ever. Will this result in interest rates going back up tomorrow?
As you can see, it is a see-saw guessing game right now, but the moral of the story is simple. If you are serious about buying a home, or even if you are just thinking about it, rates near 4% are simply too good to pass up, so why would you? Get started today and search all Austin homes for sale including Owner Financed homes in Austin!