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b'With\\xa0Terry Story, 26-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL



While most people thought the Federal Reserve\\u2019s move to raise interest rates was the tipping point\\u2014beyond which mortgage rates would begin to climb back up\\u2014Terry sheds prescient light on why that is not the case. She says mortgage interest rates have little to do with the Fed\\u2019s raising of short-term rates, but more to do with the market\\u2019s overall view on where the economy and inflation are headed over the long-term. This expectation is more closely reflected by the interest rate on the 10-year Treasury bond. So with a tame economy and weak inflation (as is currently the case) mortgage interest rates continue to be very attractive.

Moreover, as equity markets sink on fears of domestic and global economic weakness, investors move their money to highly liquid safe havens, such as the U.S. Treasury market. This action drives up Treasury bond prices, which also drives yields down and keeps mortgage rates low. So Terry urges home buyers to not read too much into the Fed\\u2019s quarter-percentage point rate increases.

Terry also gives us a heads-up on greater government oversight in the luxury home market, homes that sell for more than $1 million in most parts of the U.S. and for more than $3 million in more expensive housing markets, such as Manhattan. She says the Justice Department\\u2019s Financial Crimes Network has initiated a pilot program to find out who\\u2019s buying these expensive homes, which could cause high-end home buyers to lose their anonymity. The government is apparently doing this to track \\u201cdirty\\u201d money and to keep it out of the housing market, which is probably a good thing.

Finally, the short supply of affordable homes has led to a dramatic upswing in property rental prices and is causing multiple families to split the rent in single-family homes. Terry sees high rentals for the near future, but believes things will even out over time.'