Thinking of buying a home in Lake of the Woods or the surrounding counties? Negative interest rates could be just what you have been waiting for!
The possibility of the Federal Reserve moving interest rates below historic lows could be a reality in the near future. If you follow the stock market then you might have noticed falling stock and oils prices which has been been painful for some investors. This has been catching the attention of the Federal Reserve as well as of late.
Fed Chairwoman Janet Yellen testified before Congress last week noting that the Fed's plan to raise interest rates by at least 1 percent in the next year might be put on the back burner for now. Yellen didn't express panic regarding a selloffs, but instead discussed potentially lowering rates into negative territory.
Negative interest rates could turn the financial system upside down because depositors would have to pay banks to hold onto their money, and borrowers would get paid to borrow. This would be the first time in United States that this has happened, whereas, Japan, Sweden, Switzerland, and the European Union have already taken the plunge. While the U.S. economy still appears to be doing well by most measures, this week's action indicates that there could be more turmoil in the markets to come.
For those looking to enter the real estate market, this could be a significant event. The cost to own vs rent in most cases favors home ownership. If rates were to venture into negative territory that scale would further tip making home ownership a reality for those who might not have qualified before. Stay tuned for more news as this important story unfolds.