For anyone who owns (or plans to own) St. Cloud real estate, last week's Federal Reserve interest

rate hike came as no surprise. Even the unusual size of the raise was expected. At 75 basis points

(civilians think of that as 3⁄4%), it fell in line with universal expectations. It was what happened next that

perplexed many.

Considering the past two Fed actions together, Wednesday's move lifted the June-July cumulative

raise to 150 points, raising the target interest rate range for banks' overnight transactions to 2.25% - 2.5%.

Expected or not, it was the steepest rise in 40 years. On Tuesday, yahoo!finance.com's headline, Housing:

'Mortgage rates are going to continue to rise,' economist explains, had painstakingly laid out the

commonsense conclusions: Tomorrow, the Fed will raise rates. Also, the sun will rise in the east, gravity

will make things fall, and the rate hike will make mortgages more expensive. Duh!

The upshot for St. Cloud real estate would therefore be equally predictable: a blow to buyers and

sellers who benefit from low mortgage rates—right? Right?

Not necessarily, it turns out.

Here is where the National Association of Realtors’®'

Chief Economist, Dr. Lawrence Yun's

conclusion veered off-course, commonsense-wise. And his reaction was shared by Forbes.

The Fed move might not affect real estate markets at all.

That conclusion was rooted in the nuts and bolts of the bond market. Mortgage rates are based on

predicted future bond market pricing, and this hike "and all future actions by the Fed" may have already

peaked in mid-June. So, if bond prices have peaked, it is entirely possible that mortgage rates "may settle

down at 5.5% to 6% for the remainder of the year." In that case, rates already stand where they will

remain for a while, and "home sales could soon stabilize within a few months and then turn steadily

upwards from early next year."

We do expect an optimistic viewpoint from the NAR, but Forbes doesn't generally supply much

cheerleading content. Where St. Cloud real estate is concerned, it was at least nice to hear that there's

even a possibility that home loan rates may remain in the current range...

And what do you know? On Friday, foxbusiness.com was headlining, "30-year rates tumble even

lower." The subhead read, "With all mortgage rates sitting well below 5% today, buyers can save by

locking in a rate today." Amusingly, by Saturday, those yahoo!finance.com pundits seemed to have

reversed course 180 degrees, acknowledging Freddie Mac's Thursday finding: "Mortgage rates finally

sink back below 5%..."

If you are looking at buying or selling in August's St. Cloud real estate market, “below 5%” home

loan rates may be a bit much to expect—but you may be surprised at the opportunities that are out there.

One sure way to find out: call me!

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

Multiple Office Locations To Serve YOU!

Saint Cloud 320-259-4554

Princeton 320-983-3555

Sartell 320-259-4554

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Minneapolis 763-565-2000

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Litchfield 320-298-1140

Premier Real Estate specializes in MANY areas around Central MN including Saint Cloud, Waite Park, Rice, Royalton, Sartell, Royalton, Little Falls, Cold Spring, Saint Joseph, Elk River, Monticello, Ramsey, Saint Michael, Andover, Ham Lake, Anoka, Champlin, Buffalo, Glencoe, Brownton, Silver Lake, Kandiyohi, Dassel, Minneapolis, Maple Grove, Saint Louis Park, Saint Paul, Robbinsdale, Crystal, New Hope, Brooklyn Center, Brainerd, Nisswa, Aitkin, Albany, Coon Rapids, Sauk Rapids and more!