Fed Likely to Hold Off on Rate Cuts

When Federal Reserve policymakers meet on Tuesday, economists predict that interest rates will be left alone, according to a survey by USA Today.
Economists previously thought the Fed would cut rates in early 2007. However, their tune is changing as recent data suggests the economy is faring better than was expected given the slowdown in housing.
The Fed has left interest rates unchanged since June 2006, after raising them 17 times over two years.
Most of the economists surveyed do not expect a change in interest rates until the fourth quarter, when they think a quarter-percentage-point cut is likely. But opinions vary.
For example, economists at The Conference Board and Bear Stearns predict rates will be higher at the end of the year than they are now.
Timothy Rogers, the chief economist for Briefing.com in South Natick, Mass., says it’s too close to call.
“It could go either way right now. Anyone who comes out and says he knows which way things are going is full of malarkey,” he says.

Consumer Confidence is High 2007- Can You Benefit?

Consumers are greeting the New Year with a lot more confidence than they’ve had in months, which could be good news for the housing market.

The RBC Cash Index, created by the international polling firm Ipsos, showed U.S. consumer confidence is up from 86.9 in December to 95.3 in January. That is the highest since February of 2006. This reading was at its highest in more than two years.

“A lot of the fears people had about the economy seem to be dissipating — fears about inflation and soaring gas prices. Fears about higher interest rates and the housing bust,” says Mark Vitner, an economist at Wachovia Corp.

Source: Associated Press, Jeannine Aversa (01/12/07)

 

What does this consumer confidence latest report mean? As more people feel confident about their job, the economy, inflation and costs of living, the housing market will see more people purchasing homes as they feel secure about where their housing values will go.

 

If it is your first time home purchase or a second home, focus on the long term, you will see increases in values to levels like we did from 1996 to 2003. Real estate goes in cycles. We can see an opportunity right now that may not be here in a few years or by the end of 2007. Don’t miss out on this opportunity that has not been seen since the early ‘90s. Think about this; about ten years ago you could purchase a 3 bed 2 bath home in Pleasanton for $250,000! Today, even will a ‘soft’ market it will cost you $500,000 to $600,000 more for that same home. We cannot make any more land, and the land we have is becoming more difficult to build on or is already developed. Our area will continue to increase in value as more people relocate to the East Bay. Dont miss out on the opportunity! Own Real Estate and retire with comfort!