Recession…the hot topic of the moment. Many people are wondering if there is going to be a recession. Since we don’t have a crystal ball, economists are looking at domestic and global indicators to predict the future. One definite thing is that no one likes uncertainty, especially the markets, and there is a lot of uncertainty right now. It is apparent by the swings in the stock markets. So as Summer Winds Down, Will the Economy Follow?
The Federal Reserve lowered the benchmark interest rate at their July meeting citing reasons from slowing economic activity to trade tensions. They also indicated that it may be lowered again in September to avoid an economic slowdown. When the Fed lowers the benchmark interest rate, it can have a trickle down effect on many rates, including mortgage interest rates. The theory is that lower interest rates will stimulate consumers to take on more debt.
So, how does the recent rate change impact the real estate market? As far as the housing market is concerned, mortgage interest rates are at historical lows and probably won’t decrease any further, even with additional decreases in the fed funds rate. With the lack of housing inventory combined with low interest rates, it is highly unlikely that a recession will tank the housing market like in 2008. The housing market probably won’t experience the growth it has experienced over the last few years, and for us in Coachella Valley, the housing market should continue to be stable.
Summer is winding down and season is approaching. It is a great time to purchase a desert home. Contact me and we can discuss your local market. If you’re worried about the economy or a recession, maybe you need a food and beverage break. Check out my guide to Coachella Valley happy hours! Drink sensibly!