When Are Interest Rates Likely to Rise? & Why Are Rental Rates So High?

Interest Rates:

So part of the reason that interest rates remain so low is because the Fed has been buying mortgage backed securities to the tune of 40 Billion (yes with a B) per month. The reason that keeps rates lower is that if you have plenty of buyers for your Bonds then you don’t need to raise the interest rates in order to attract new buyers even when your competition for that investment money (Stocks) is paying well. 

At some point the Fed is going to slow down or stop this practice as the threat of inflation rises. When will the Federal Reserve start to pare back its bond buying? Look for an announcement in Nov. that the process will begin in Dec. The Fed previously envisioned beginning the so-called tapering of its purchases of Treasuries and mortgage-backed securities in 2022, but the inflation spike that has hit the economy this year is likely to move up their timetable a bit.

Central banks around the world are grappling with the same challenge: How and when to pull back monetary stimulus as the global economy recovers from last year’s slump and the pandemic continues to wax and wane in different countries. The central banks of Japan and the U.K. have already begun the process of slowing their asset purchases, putting them ahead of the Fed and the European Central Bank. When and how quickly central bankers move depend heavily on how their respective countries are faring with COVID-19. However… There are some signs that price increases (for goods, services etc..) are no longer accelerating and today we will get the employment report as well as some other inflation indicators over the next week just before the Fed’s next meeting.

Rental Rates:

Apartment rents are rising across the nation as tenants return to cities and soaring home prices push many would-be buyers out of the market. One data provider shows the median rent for a one-bedroom apartment is up 9.2% since the second quarter of 2020. Two-bedrooms…up 11% during that period. Negotiating power has shifted toward landlords. Earlier this year, renters could expect one or more months off a typical 12-month lease. Those days are gone. For more information contact Kevin Berju NMLS #137213 www.PhillyMortgageTeam.com 215-681-3587

Article Written By: Kevin Berju 

American Financial Network NMLS # 137213

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Kevin Berju starts Philly Mortgage Team with over 25 years in the mortgage industry. Prior to working with residential and commercial mortgages, Kevin graduated with a business degree from Temple University, owned his own business, and worked as an agent for years in both commercial & residential Real Estate. With Kevin’s diverse knowledge of the real estate and mortgage industries, his clients are thoroughly guided throughout their home buying or refinance process. As a result of his knowledge, attention to detail, responsiveness to his clients, and exceptional work ethic, Kevin was awarded the Five Star Mortgage Professional recognition in Philadelphia Magazine for the past successive years as well as reaching the top 1% of all originators country wide since 2012 as designated by Mortgage Executive magazine.

As a mortgage professional for over 2 decades, Kevin is an invaluable resource for both first-time and experienced home buyers. With his accomplishment of the Certified Mortgage Planning Specialist designation, Kevin is placed in an elite group of the top 5% of mortgage professionals in the industry. Looking to Purchase or Refinance in Pennsylvania, New Jersey, or Florida? Kevin Berju is the Lender for You!

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