A Brighter Tomorrow for Real Estate?

2007 will ring in at Midnight Sunday. We wish you a very Happy New Year!

An interesting article on MSN RealEstate.com shows some positive signs for real estate in 2007. They reported that interest rates are the wild card here. The Mortgage Bankers Association of America expects the Federal Funds Rate -- the interest rate on overnight loans between banks -- to remain at 5.3% throughout 2007, with the average 30-year fixed mortgage rate climbing to 6.6%, from 6%, and the one-year adjustable mortgage rate average staying about the same at 5.8%. According to the NAR, the Fed Funds Rate will fall to 4.8% by the end of 2007, the 30-year fixed rate will hit 6.7%, and the one-year adjustable rate will decline to 5.5%.

But no matter how you spin it, interest and mortgage rates are and will remain at historically low levels. The rest of the economy isn't in terrible shape, either -- the unemployment rate hovers around a relatively low 5%, and the stock market is in the midst of an encouraging rally.

"The law of supply and demand, more than anything, is going to be the driving force that keeps the market relatively 'flat,' throughout the year," says Rizzo. "Since we expect the economy to continue to improve, rents to continue to rise, interest rates to remain relatively low and investor supplies to be absorbed, the 2007 'flat' market will set the stage for brighter predictions in 2008."

May 2007 be a great year for you andyours!