Arizona Real Estate Notebook

I love that graph! Rates are below 6.0% again and the outlook is good for the future. (See quote below.)

When prices go up, it’s good for sellers. When prices go down, it’s good for buyers.

It’s different for interest rates.

When interest rates goes up, it’s bad for both buyers and sellers. When interest rates goes down, it’s good for both.

According to Freddie Mac;

“U.S. nonfarm productivity jumped by an annual rate of 6.3 percent in the third quarter, the most since 2003, while labor costs fell 2.0 percent. Greater efficiencies and lower costs ease pressures for companies to raise prices and offer the Federal Reserve (Fed) more leeway to reduce short-term rates. Currently, the federal funds futures market has almost a 100 percent probability that the Fed will lower rates in its December 11th policy committee meeting. These combined factors will likely diminish upward pressures on mortgage rates over the next few months.”

Lower home prices and potentially lower mortgage rates mean the market in 2008 might start cutting into that huge inventory of homes for sale.