Investor Intel: the Fed has Spoken, Rates Remain
A rollicking few weeks on Wall Street and concerns over the slow pace of inflation has compelled the Fed to leave interest rates unchanged, despite evidence of an improving U.S. economy. We’ll have to wait another month to see if rates start rising, if not all the way into 2016. What will a rate hike mean for the rental property investor? It’s a mixed bag. For one, an improving economy means owners could benefit from higher occupancy rates and rents. On the flip side, rising mortgage rates may increase the costs of purchasing properties. Time to lock in that loan.
Ahead of the rates news, U.S. stocks jumped to a four-week high on Wednesday, spurred by a rally in energy shares. The S&P 500 has alternated between gains and losses for the past nine weeks, but has largely rebounded 6.8 percent since a low last month. While the Chicago Board Options Exchange Volatility Index has slipped 47 percent from its high last month, it was still 38 percent above its annual average. This is putting a damper on consumers’ spirits, as Americans’ expectations for the economy declined to a four-month low in September, according to the Bloomberg Consumer Comfort Index.
The U.S. labor market improved in August, and initial jobless claims fell by 11,000 to 264,000 in the week ending September 12, the Labor Department said Thursday. Economists had expected 275,000 new claims. The unemployment rate is now at 5.1 percent.
Separately, U.S. housing starts fell 3 percent in August from a month earlier to an annual rate of 1.126 million last month, the Commerce Department said, however this is being seen as a minor blip rather than a sign of things to come. Economists had expected housing starts to reach a rate of 1.18 million. Despite this, U.S. homebuilders’ confidence in the market for newly constructed single-family homes continues to rise in September with a one point increase to a level of 62 on the National Association of Home Builders/Wells Fargo Housing Market Index—the highest reading in 10 years.
With the U.S. housing sector still strong and fueling the economy, it may be a good time to move as the Fed stands still.
B2R Finance offers rental investors innovative lending products to help unlock equity from existing portfolios and provide the cash needed to build rental portfolios nationwide. For more information about how B2R can help you obtain rental property financing, just call 800-227-8107 or visit www.b2rfinance.com/borrowers and follow us on Twitter @B2RFinance.
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