Signaling what many perceived to be a lack of faith in the economy, the Federal Reserve took the extraordinary step of signaling that it would hold short-term interest rates at exceptionally low levels “at least through mid-2013.” This move, which was a bit controversial, marks the first time that the U.S. central bank has pegged a specific timetable to a pledge on its benchmark interest rate, the federal funds rate, which has been near zero since late-2008.
While fears of down-the-road inflation are growing stronger, there is a potential upside to the news. For instance, it will continue to be a buyer’s market in Orange County. If you are interested in buying a home, either for your family or as in investment, in South Orange County, now is the time! The lack of movement in the real interest rate will keep the cost of borrowing low; which leads businesses or individuals to increase investment spending, and it leads households to buy durable goods, such as autos and new homes. While low real interest rates AND a healthy economy would be ideal, the latter is not in our near future.
Therefore, let Cheryl Marquis of Altera Properties help you take advantage of what our economy can offer: a great deal on an Orange County home! Call Cheryl Marquis today to begin the quest for your perfect South Orange County home.
In addition, lower real rates and a healthy economy may increase banks’ willingness to lend to businesses and households. This may increase spending, especially by smaller borrowers who have few sources of credit other than banks.