Friday, September 8, 2023 / by Fahad Karamat
In the bustling heart of Los Angeles, where the market's pulse often mirrors the beat of Hollywood's latest track, there's one under-the-radar influencer: interest rates. Much like our dive into the intricacies of home buying blunders, today, let's take a backstage tour of the symphony of interest rates and their role in the real estate ballet.
A Flashback to Financials: The Basics of Interest Rates
Before we deep dive:
What Are Interest Rates? Essentially, they represent the cost of borrowing money. Lower rates generally mean cheaper mortgages.
Who Sets The Rates? Central banks, like the Federal Reserve, play a key role, though individual bank rates and creditworthiness also factor in.
Setting the Stage: How Rates Shape Buyer Behavior
Interest rates don the director's hat here:
Affordability: Lower rates can drastically reduce monthly payments, making pricier homes within reach for buyers.
Buyer Urgency: A hint of rising rates in the future can rush buyers . ...
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real estate, buyers market, buying a home, mortgage, interest rate
Wednesday, July 26, 2023 / by Fahad Karamat
In the intricate web of economics, the Federal Reserve (often called "the Fed") stands as a formidable entity, casting its influence far and wide. For real estate enthusiasts, understanding the Fed's operations is crucial in grasping the underpinnings of the housing market's ebb and flow.
The Central Banking Behemoth
As the country's central bank, the Federal Reserve's primary mandate encompasses fostering financial stability, curbing inflation, and championing maximum employment. Integral to this mandate is the regulation of interest rates, a mechanism by which the Fed deftly directs the trajectory of the US economy.
The Federal Open Market Committee (FOMC) - The Decision Makers
Nestled within the Federal Reserve is the FOMC, the nerve center of decision-making. Assembled eight times annually, the FOMC meticulously assesses economic indicators to plot the course of the nation's monetary policy. The committee's eclectic mix of members, ranging from the Board of Governors . ...
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mortgage, interest rate, economy, fed, real estate investment
Wednesday, June 14, 2023 / by Fahad Karamat
In an unforeseen twist, the Federal Reserve has decided to hold its benchmark interest rate, offering borrowers nationwide a temporary sigh of relief. Yet, with future rate hikes looming, how should we interpret this decision?
Taking a Breather Amidst the Rate Hike Marathon
Over the past months, the Federal Reserve has been on a rate-hike spree to address the rampant inflation concerns. Their recent choice to maintain the rate at 5.1% has made some market observers raise an eyebrow. This hiatus might be the Fed's strategy to assess the long-term effects of their prior rate hikes.
Reading Between the Lines
Chairman Jerome Powell's commitment to mitigating inflation is evident. However, his cautious approach indicates that there's still uncertainty surrounding the broader economic trajectory. The balance is indeed fragile: combating inflation without denting the growth momentum.
A Mixed Bag of Predictions
Despite the hawkish hint at two potential rate hikes,. ...
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news, interest rate, economy, fed
Wednesday, May 3, 2023 / by Fahad Karamat
Just when you thought the Fed's rate hike playlist had one more track, they might have just hit pause. The latest quarter percentage point hike brings relief and renewed uncertainty in an economy dancing to many tunes. Let's decipher the song sheet.
The Rate Hike Marathon and Its Finish Line
The Federal Reserve, with its 14-month rate-hiking spree, has nudged the benchmark rate to a zone of 5-5.25%. After ten encores at consecutive meetings, it's an anticipated act but now seems to be taking its final bow for a while.
Inflation's Cooling Groove
Last summer's scorching inflation seems to be on a cooling trend. However, don't pack away those fans yet. At double the central bank's 2% dream target, the mercury is still high, with March data swinging to a 4.2% YoY rise.
Economic Sectors: Feeling the Rate Beat
The Fed's rate rhythm has sectors like construction and manufacturing tapping their feet more slowly. The dance floor of consumer spending, bustling in Ja! ...
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inflation, interest rate, economy
Wednesday, April 12, 2023 / by Fahad Karamat
When it comes to U.S. inflation, it's not all about the Benjamins. Sometimes, it's about the eggs! Recent data paints a brighter picture of U.S. inflation, with egg prices playing a significant role. But will the Federal Reserve whisk things up with another interest rate hike?
A Dive into the Numbers
As they say, numbers never lie, and in March, the story they tell is one of cooling down. U.S. inflation saw its lowest level in nearly two years, with the consumer-price index ticking up by only 5% year-over-year. A welcome change, considering February's 6% ascent. This moderation was fueled by drops in grocery, gasoline, medical care, and utility costs, though frequent fliers and insurance hunters might still be feeling the pinch with high prices.
Peeling Back Layers: The Core Inflation Narrative
Strip away the volatile food and energy prices and you get core inflation. At 5.6% YoY in March, it's a subtle nudge up from February's 5.5%. Shelter costs are the main culprits behind; ...
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news, interest rate, fed, inflation
