The yield on 10-year U.S. Treasure bonds has now hit an all time low. The “yield curve” which is the measurement used to tell the difference between long-term and short-term rates has also hit all time low levels (Forbes). The collapse in the yield curve is significant according to experts as it has been a strong historical indicator for a glooming recession on the horizon…but what does that mean? Do current market conditions indicate we are on the verge of an imminent recession? If past and current market conditions are the predicting indicators that determine future market conditions and a possibility of a recession, the answer according to the experts is a resounding NO. Not even remotely close!
In recent months we have gone from serious concerns over the anticipated rate increases by the Federal Reserve to concerns that rates are actually too low. In previous market cycles the collapse of the spread was driven in part by the Fed raising short-term rates as longer-term rates declined, in combination with the lack of demand for capital, which contributed in part to the perfect set of circumstances that spiraled the collapsing recession in 2008.
Today’s circumstances are actually the exact opposite situation. In fact, experts point to signs such as the booming economy, historical low unemployment, and low interest rates that continue to stimulate the economy to support their findings. Additionally, many top experts further suggest there are no future signs of an imminent slowdown and that the economy is running on all cylinders. Current 30-year fixed-rate mortgage interest rates remain at historic lows around 4.82% — with over 63% of homeowners with mortgages paying rates between 3.63% and 7.84%, according to the (Census Bureau.) In 2018 we experienced a modest increase in rates, but since that time rates have once again fallen below 5%. When taking into consideration rates dating back over the past 48 years the 30-year fixed-rate mortgage rate reached an all time high of nearly 19% in 1981. Wow how times have changed! As of January 2019, interest rates for a new 30-year mortgage are as low as 4.51%. The low rates continue to provide favorable terms for prospective homebuyers as the lower interest rates keep the monthly mortgage payment more affordable and increased buying power more attainable.
What does all of this mean for perspective homebuyers? The answer is now is a magnificent time to buy a home! Experts recommend you explore buying before rates and/or home prices increase and limit your purchasing power. The Las Vegas market has finally stabilized and concerns of a colossal market crash are now a distant memory. The future of the Las Vegas looks bright especially for relocating buyers and/or sellers looking to sell and upgrade from their home. According to industry experts the Greater Las Vegas real estate market is projected to experience continued growth and strong appreciation for the foreseeable future.