With the recent volatility in the stock market combined with rising interest rates and the lengthy bull market run since 2009, more of our clients are asking us, “Where is the market headed?”
While we often monitor the output of real estate markets with average price and price per square foot metrics it is also useful to monitor the health of the Bay Area economy to better predict future performance. The Bay Area Council Economic Institute and McKinsey & Company just released the 10th edition of their Bay Area Economic Profile.
Recently our clients have asked us more and more “Where are we in the current real estate cycle and do you foresee a correction in the near-future.” This question is a valid considering the strong market that has persisted for years, rising interest rates and the new GOP Tax Plan that reduced deductions for real estate taxes and mortgage interest.
The benchmark 30-year fixed-rate mortgage rose this week to 4.52 percent, according to Bankrate’s weekly survey of large lenders. Rates have increased almost half a percentage point since the beginning of the year and have risen for seven consecutive weeks. 30-year fixed rates are at the highest point since April 2014, when the average rate was 4.54 percent.