By Mike Sunnucks | Rose Law Group
Mortgage interest rates are low, and the Federal Reserve Bank’s recent cut of the prime rate will encourage more prospective home buyers.
That is according to regional real estate expert Jim Belfiore.
“Most people outside of real estate do view the Fed Rate as equivalent to mortgage interest rates,” said Belfiore, who is president of Belfiore Real Estate Consulting.
The Federal Reserve’s prime lending rate is not tied to mortgage interest rates.
But the central bank’s action impact prospective home buyers’ behaviors, Belfiore said.
“They think if the Fed drops the rate, they think that impacts mortgage interest rates,” Belfiore said. “I think that gets more people out.”
Consequently, the Fed cutting the prime rate by 0.25 Wednesday should encourage home buyers, Belfiore said.
“When they hear that and it piques their interest,” he said.
That add some positive fuel to the Phoenix regional housing market. The housing picture has improved in metro Phoenix since a slow start to the year.
New homes sales between mid-June and mid-July were up 20 percent compared to the same time period a year ago, according to Belfiore’s latest research.
“Buyers are shopping later in the year and they are trying to take advantage of the lower rates,” Belfiore said.
Mortgage interest rates are at three-year lows and could hit historic lows, Belfiore said.
The regional housing market is up the past couple of months after a slow start to 2019.
Belfiore said part of that slow start earlier this year stemmed from concerns about the federal government shutdown that ran from late December into January. He also said the slow start to this year’s home sales came after the Fed raised rates.
