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December Liftoff Good for US Housing

An Omicelo Housing Report

"US housing to get a major boost from the Federal Reserve at 2pm today"

Bottom Line: Take advantage of real estate related assets this winter. The Fed has every right to delay the anticipated December liftoff. Instead, the Fed is very likely to raise the benchmark rate and signal that they will not raise again for some period of time. This all-important signal will result in the Fed sidestepping the January or March interest rate lift, Wall Street economists lowering their year-end 2016 interest rate forecasts, and market-based interest rates going lower than today’s level in 3-6 months’ time. This scenario could create a near term shock to the US Housing market and other parts of the economy, but rates near or below current levels are very attractive for US real estate and will prevail as the dominating support for US Housing if a rate shock is short-lived (i.e. the Fed skips a rate increase on January 27th or March 16th). Winter 2016 will be unnerving and a little cold for the real estate industry; a year from now, however, most real estate assets will have seen continued appreciation that should continue for the next 3-5 years.

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