Last week the chairperson of the Federal Reserve, Janet Yellen, gave her testimony to both House and Senate committees, which included interesting information for homeowners and real estate investors.
Most notably, she signaled that although the Fed will be likely to start increasing rates at some point in the not-too-distant future, it isn't time just yet due to a still uncertain economy. This means the Fed will continue to keep interest rates at incredibly low levels for the time being. After this testimony, the 10-year Treasury bond yield dropped to 2.54%, and that's certain to cause mortgage rates to drop with it in the coming weeks. This means that you will probably be well served to look at refinancing if you're still paying higher rates from past years.
Interest rates are likely to increase at some point in 2015, so now is the time to start talking to a mortgage lender about refinancing. There are numerous mortgage calculators on the internet that you can use to see how beneficial it would be for you to refinance, or if you're one of our clients, you can contact us and we can assist you with it.
Also in the Chairperson's comments were some words directly related to the housing market. She referred to “little recent progress” in the housing market, and stated that “housing activity leveled off in the wake of last year's increase in mortgage rates, and readings this year have, overall, continued to be disappointing.” While this is not good for owners looking to sell properties, this is good news for owners holding income property, because it means you're still likely to have little problems finding decent tenants.
While we continue to expect housing to improve over the next few years, our analysis is that we expect the real improvements to come later rather than sooner, with any significant improvements probably not coming until at least the second half of next year. That means income property is still the place to be for real estate investors. Give us a call if you'd like to look at more purchases to add to your income property portfolio.