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Commercial interest: Watching interest rates

There are many things you should do if you plan to make a real estate purchase, but one of the most important is to monitor the real estate trends for the type of property you wish to purchase. If you're interested in buying commercial property, then it's a good idea to know the current interest rates within the sector you're interested in. Right now, the commercial rates are good, and the reality is that they're likely to stay stable in the future. That's great news if you plan to buy or sell in the future, since buyers will have an easier time obtaining a mortgage.

Take for example a commercial real estate purchase in the United States. Right now, as of May 2018, it has been estimated that there will be three rate hikes in 2018. This is based on policy meetings involving the Federal Reserve in Dec. 2017.

Lending rates rose in December by around one-quarter percent, moving from 1.25 percent to 1.5 percent. Additionally, as inflation slows, it might make it harder for the Federal Reserve to continue to make rate hikes, which could be good news in the future.

It's a good idea to do everything you can to make a purchase when rates are low, since they'll only increase when inflation does as well. The Federal Reserve has the potential to drop or increase rates as necessary for economic purposes. Low rates are normally a sign that the economy isn't particularly strong, but you could use that to your advantage if you plan to make a purchase.

Source: Forbes, "3 Commercial Real Estate Trends To Watch In 2018," Ely Razin, accessed June 01, 2018

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