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Winter is coming… And so are national interest rate increases.

The Federal Reserve has recently announced a new national interest rate hike, the first since 2006. Real estate investors are very anxious about the announced rate hike. Many investors are wary that the rate hike may be instituted prematurely in an economy that is not capable of facilitating the effects on real estate markets.

Mark Fleming, Ph. D. serves as the Chief Economist for First American Financial Corporation. With over 20 years’ experience in mortgage and property information, Mark analyzes and forecasts national mortgage and real estate markets. This episode, Mark lends his expertise to our discussion on the new rate hike‘s effect on current real estate markets at a national level, and tells us why investors shouldn’t be so worried.

• Federal Reserve Rate Hikes
  • First rate hike in 9 yrs
    • 2006 – +5% increase
    • 2007 -’08 to Present – 0%
    • End of Year (2015) – .25% increase
    • 2016 – +1% increase
  • Instituted to correlate with expected income/wage growth
  • Long-term, fixed-rate loans not affected
  • Good for housing markets
    • House-price appreciation seeing “asset inflation”, especially in Florida
    • 5-6% nationally, higher in FL markets (South Florida)
    • Out-pacing current wage growth, causing increase in housing rates
    • Rate hike should slow appreciation growth rate
• 2016 and Beyond
  • Rate hike est. 5% increase
  • House-appreciation (Nationally) projected to slow to 3-4%
  • Income growth est. 3-4% increase
  • Commercial real estate to benefit from economic growth
  • Multi-family to benefit from strong millennial rental market

Interested in contacting First American Financial or want to learn more from Mark on the new rate hike and other economic info? Check out the company website and visit the Economic Center

The post Ep. 60 – Mark Fleming: What Does the Fed Rate Hike Mean to Real Estate Investors appeared first on Real Estate Investing in Florida.