How the debt ceiling might impact the NYC real estate market!

I received an email from my company about the debt ceiling and how it might impact the real estate market and wanted to use that as my topic!

The debt ceiling is the maximum amount of money the government can borrow. If the government couldn't come to an agreement, the US would have defaulted on its debt which could have been devastating to the economy.

Because of all this systemic uncertainty, we have seen interest rates for US treasuries increase and mortgage rates are based on the treasury rates.

Two to three months ago, rates were in the low 5% without relationship pricing. At the end of last week, they were up to around 7%.

Over the weekend an agreement was reached and even though an agreement was reached, rates still increased Tuesday. But the past two days have seen slight decreases and predictions are that rates should go back to around mid 6%.

The NYC market is unique where we have much more all cash buyers in our market - typically around 25% of all sales are cash, but recently, its around 40%.

With very low inventory, and more buyers than sellers, even though it costs significantly more for buyers financing to carry their properties, prices haven't been decreasing because there is enough liquidity in the market with the all cash buyers to keep the strength.

If rates ultimately go back in the 5% range, I would expect a flood of buyers coming into the market.

The summary to anyone planning to finance RIGHT NOW is that it’s better to not have as much competition if you have a stable job where you can refinance after closing if rates decrease. Right now could be a great time to buy if those are your circumstances!

If you've been looking for a while when rates were at historic lows, its hard not to have hindsight bias, but you must look forward!

I'm here if you have any questions! DM me on Instagram @DanielleSellsNYC

Check out my YouTube video on the debt ceiling for more info on the topic!