Real Estate Watch – Deanne Motsenbocker – Portfolio Real Estate
What’s Up with the Feds? Not Interest Rates… Net Worth!
There’s been quite a bit of hubbub surrounding talk of the Federal Reserve raising interest rates. But with their announcement in September that they will put off an interest rate hike and revisit rates at the end of the year, many have not noticed an important Federal Reserve finding: the net worth of American households hit a new record high in the second quarter of 2015 and total mortgage debt grew at its quickest level since the recession ended.
U.S. household net worth, which the Federal Reserve defines as net assets (such as homes, stocks, savings, etc.) minus debt (such as mortgages, credit cards, etc.) rose to $85.7 trillion during the second quarter as reported by the Federal Reserve in September.
Rising household wealth usually makes consumers feel more financially secure and with that comes more willingness to spend. Mortgage debt grew in second quarter at the quickest rate since 2009.
In the national real estate market existing home sales fell slightly in August but according to the National Association of Realtors, buyer demand remains high, while price appreciation is normalizing. With interest rates remaining low, overall demand high, and inventory still low, they are predicting that although the change in season usually means a slow down, it may not be so.
We shall see how it goes as we head into fall in our luxury market of 92067. Greater San Diego Association of REALTORS® stats for August show that the median sales price is up, pending sales are up, and closed sales are up year-to-date. But, as predicted in my last article, the number of active listings is also up. In fact it has doubled year-over-year, up 16.2 percent if you look at year-to-date. Average time on market has increased significantly in Rancho Santa Fe.
Fall is fast approaching. Our temperatures will cool but with continued low interest rates we hope our home sales will not. For more specific information on the market or your home value contact Deanne Motsenbocker.