Here are three big reasons why it’s likely that interest rates will continue to fall through 2015:
1. The Federal Reserve and Bond Rates
The relationship is complex, but interest rates on U.S. bonds have a direct impact on the mortgage market. Many are anticipating a rise in interest rates when the Federal Reserve raises interest rates in the second half of 2015. However, this may not happen at all. Although Federal Reserve President Janet Yellen has hinted that she will raise rates in 2015, it’s important to remember that this has happened many times before. Back in 2009, many expected the Fed to raise rates as early as 2011, and the Fed hinted as much around then. However, it never happened. In fact, rates fell even lower.
2. Supply and Demand
Another big trend is that there are more people looking to finance real estate. It’s obvious that real estate is back. Prices are going up, demand is rising, and the market is strong. Holders of capital want to get in on this, meaning there is a bigger interest in supplying credit to rehabbers and flippers.
Of course, the basic law of supply and demand suggests that those creditors’ profits will go down as the supply of credit goes up. This is great for lenders because it means interest rates are going down.
3. Cheap Oil
Finally, we get to oil. The cost of oil has become a huge issue throughout the economy. Cheaper oil has a lot of effects, and one of them is on mortgage rates. With cheap oil, there is less inflation in the economy, which means lower rates on credit. Again, this spells out the same thing: cheap credit for real estate developers.
How to Get Cheap Credit
If you are a real estate flipper, rehabber, or developer, you can get flexible financing solutions for your real estate project from a specialist creditor who knows and understands your market. Socotra Capital can provide you with the hard money loan for your needs, even offering same-day pre-qualification so you can get started right away. Whether you just need a little extra help to finish a remodel or you’re starting a ground-up construction project, we can help.
Your real estate assets are your best investments for the future. At Socotra Capital, we’re proud to be the premier direct hard money lender for California real estate. Contact us today to learn more about how we can help.