What Effect Do World Events Have on the U.S. Housing Market?
There’s quite a bit going on in the world right now—tensions with Iran, trade issues with China and, more recently, the coronavirus.
If you’re thinking of buying or selling a home this year, you may be wondering what effect, if any, these global events can have on real estate. Here are a couple areas to consider.
Mortgage rates. Global instability often causes foreign investors to see U.S. Treasury Bonds as a safe place to park their money. As money flows into treasuries, the yield on those bonds decreases which, in turn, helps keep mortgage interest rates down. Right now, rates are expected to remain at or below 4%, but if worldwide economic conditions change, those rates could rise.
Consumer confidence. Consumer confidence is an economic indicator that measures consumer optimism about the economy and their personal financial outlook. Turmoil in the world economy sometimes spooks investors here in the states. When that happens, we see what looks like instability on Wall Street and that affects consumer confidence negatively.
Historically, we also see a dip in consumer confidence in the fall of every presidential election year. While that measure has always increased post-election in November, the dip normally changes the timing of the real estate market in that we see spring markets start earlier, summer markets last longer and a lull in the fall.
While those are just a few ways that broader events affect the market, conditions are always changing. To stay updated on what’s happening in your market, contact a Long & Foster agent who can help guide you through the process of buying or selling a home.
Marnie Schaar & Associates Long & Foster Real Estate are licensed Virginia Real Estate Marnie@LNF.com · Cell: 703.509.3107 | Margo@LNF.com · Cell:571.839.6009
2100 Reston Pkwy Suite 102 · Reston, VA 20190
Original Content Posted on Long & Foster's Blog the Newsroom, click here to view post.