Trump and Real Estate

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Posted by Park Ridge Real Estate | Posted in Interest Rates | Posted on 24-01-2017

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Four days ago a new administration was sworn-in to lead our country. Like many Americans, we all have questions as to how this will affect our lives, both physically and financially.  The “physical” part is what will become of our healthcare programs, namely, what will happen to the ACA? Financially, we want to know what will happen with interest rates, taxes and income.  Let’s break it down.

Checking today’s interest rates in Illinois, here’s what I found:
Mortgage rates for Illinois from Lender411:
30-year fixed-rate mortgages are at 4.21%. That dropped from 4.38% to 4.21%.
The 15-year fixed rates are now at 3.63%.
The 5/1 ARM mortgage for Illinois is now at 3.58%.

These rates are still much lower than they were 5-10 years ago, when they were in the 6% and up ranges.
The FED has been flirting with raising the rates for more than a year.

Here’s a snippet from a recent AP article:

By MARTIN CRUTSINGER
AP Economics Writer

“WASHINGTON (AP) – Federal Reserve Chair Janet Yellen says she expects the Fed to raise its benchmark interest rate several times a year through 2019, as it moves closer toward to its economic goals of maximum employment and stable inflation.

But in a speech in San Francisco Wednesday, she said she can’t say when the next interest rate will occur or how high rates will rise. She says that will depend on how the economy performs in the coming months.

She says Fed officials, who boosted rates for a second time last month, expect to raise rates “a few times a year” until they have pushed the Fed’s benchmark rate close to 3 percent by the end of 2019. The rate now stands in a range of 0.5 percent to 0.75 percent.

The 3 percent level for the Fed’s target for the federal funds rate, the interest that banks charge each other, is the point that the Fed currently believes is the so-called neutral rate – the level where the Fed’s interest rate policies are not spurring growth or holding it back.

“Right now our foot is still pressing on the gas pedal, though, as I noted, we have eased back a bit,” Yellen said. “Our foot remains on the pedal in part because we want to make sure the economic expansion remains strong enough to withstand an expected shock, given that we don’t have much room to cut interest rates.””

When rates go up, your mortgage goes up – it’s as simple as that. that being said, there’s nothing simple about the cause and effect of raising interest rates. Economists argue that lower interest rates hamper growth. Raise the rate too high, and many people are priced out of buying a home. There’s no doubt that it is complicated. We have ample data to study the cause and effect of high interest rates; look at table below – the rates were 4x of what they are now.

2016
Announcement Date Index Month Index Value
Oct 27, 2016 Sep 2016 3.61
Sept 28, 2016 Aug 2016 3.58
Aug 30, 2016 July 2016 3.62
July 27, 2016 June 2016 3.69
June 29, 2016 May 2016 3.70
May 26, 2016 Apr 2016 3.75
Apr 28, 2016 Mar 2016 3.73
Mar 29, 2016 Feb 2016 3.88
Feb 25, 2016 Jan 2016 3.98
2015
Announcement Date Index Month Index Value
Jan 28, 2016 Dec 2015 3.97
Dec 30, 2015 Nov 2015 3.85
Nov 24, 2015 Oct 2015 3.89
Oct 29, 2015 Sept 2015 3.93
Sep 29, 2015 Aug 2015 3.99
Aug 27, 2015 July 2015 4.02
July 30, 2015 June 2015 3.85
June 25, 2015 May 2015 3.75
May 28, 2015 Apr 2015 3.78
Apr 28 2015 Mar 2015 3.80
Mar 26 2015 Feb 2015 3.77
Feb 26 2015 Jan 2015 3.88
2014
Announcement Date Index Month Index Value
Jan 29 2015 Dec 2014 3.98
Dec 30 2014 Nov 2014 4.00
Nov 25 2014 Oct 2014 4.11
Oct 30 2104 Sep 2014 4.06
Sep 30 2014 Aug 2014 4.08
Aug 28 2014 Jul 2014 4.09
Jul 31 2014 Jun 2014 4.08
Jun 26 2014 May 2014 4.18
May 29 2014 Apr 2014 4.24
Apr 29 2014 Mar 2014 4.22
Mar 27 2014 Feb 2014 4.30
Feb 27 2014 Jan 2014 4.37
2013
Announcement Date Index Month Index Value
Jan-30 2014 Dec 2013 4.25
Dec-24 2013 Nov 2013 4.21
Nov-26 2013 Oct 2013 4.32
Oct-29 2013 Sep 2013 4.38
Sep-26 2013 Aug 2013 4.26
Aug-29 2013 Jul 2013 4.01
Jul-30 2013 Jun 2013 3.55
Jun-27 2013 May 2013 3.40
May-30 2013 Apr 2013 3.56
Apr-25 2013 Mar 2013 3.54
Mar-28 2013 Feb 2013 3.43
Feb-26 2013 Jan 2013 3.35
2012
Announcement Date Index Month Index Value
Jan-29 2013 Dec 2012 3.29
Dec-27 2012 Nov 2012 3.36
Nov-29 2012 Oct 2012 3.44
Oct-30 2012 Sep 2012 3.56
Sep-27 2012 Aug 2012 3.56
Aug-28 2012 Jul 2012 3.66
July-26 2012 Jun 2012 3.67
Jun-26 2012 May 2012 3.78
May-29 2012 Apr 2012 3.93
Apr-26 2012 Mar 2012 3.90
Mar-27 2012 Feb 2012 4.08
Feb-28 2012 Jan 2012 4.25
2011
Announcement Date Index Month Index Value
Jan-26 2012 Dec 2011 4.15
Dec-22 2011 Nov 2011 4.22
Nov-22 2011 Oct 2011 4.19
Oct-27 2011 Sep 2011 4.38
Sep-27 2011 Aug 2011 4.56
Aug-30 2011 Jul 2011 4.57
Jul-27 2011 Jun 2011 4.62
Jun-28 2011 May 2011 4.74
May-25 2011 Apr 2011 4.80
Apr-26 2011 Mar 2011 4.84
Mar-29 2011 Feb 2011 4.79
Feb-24 2011 Jan 2011 4.71
2010
Announcement Date Index Month Index Value
Jan-27 2011 Dec 2010 4.58
Dec-28 2010 Nov 2010 4.42
Nov-23 2010 Oct 2010 4.49
Oct-28 2010 Sept 2010 4.55
Sept-28 2010 Aug 2010 4.65
Aug-26 2010 Jul 2010 4.78
Jul-27 2010 Jun 2010 4.91
Jun-24 2010 May 2010 4.99
May-27 2010 Apr 2010 5.02
Apr-27 2010 Mar 2010 4.99
Mar-30 2010 Feb 2010 5.05
Feb-25 2010 Jan 2010 5.01
2009
Announcement Date Index Month Index Value
Jan-26 2010 Dec 2009 4.92
Dec-24 2009 Nov 2009 5.01
Nov-24 2009 Oct 2009 5.02
Oct-27 2009 Sep 2009 5.16
29-Sep 2009 Aug 2009 5.25
27-Aug 2009 Jul 2009 5.26
28-Jul 2009 Jun 2009 5.09
25-Jun 2009 May 2009 4.99
28-May 2009 Apr 2009 4.88
28-Apr 2009 Mar 2009 5.06
26-Mar 2009 Feb 2009 5.04
26-Feb 2009 Jan 2009 5.12
2008
Announcement Date Index Month Index Value
22-Jan 2009 Dec 2008 5.51
30-Dec 2008 Nov 2008 6.18
25-Nov 2008 Oct 2008 6.16
28-Oct 2008 Sept 2008 6.17
25-Sep 2008 Aug 2008 6.46
28-Aug 2008 Jul 2008 6.41
24-Jul 2008 Jun 2008 6.23
26-Jun 2008 May 2008 6.04
27-May 2008 Apr 2008 5.97
24-Apr 2008 Mar 2008 6.03
25-Mar 2008 Feb 2008 5.87
26-Feb 2008 Jan 2008 5.97
2007
Announcement Date Index Month Index Value
24-Jan 2008 Dec 2007 6.23
27-Dec 2007 Nov 2007 6.35
27-Nov 2007 Oct 2007 6.50
25-Oct 2007 Sept 2007 6.59
25-Sept 2007 Aug 2007 6.73
28-Aug 2007 July 2007 6.74
25-July 2007 June 2007 6.58
26-June 2007 May 2007 6.37
24-May 2007 Apr 2007 6.28
26-Apr 2007 Mar 2007 6.33
27-Mar 2007 Feb 2007 6.40
27-Feb 2007 Jan 2007 6.37
2006
Announcement Date Index Month Index Value
25-Jan 2007 Dec 2006 6.40
28-Dec 2006 Nov 2006 6.45
28-Nov 2006 Oct 2006 6.54
26-Oct 2006 Sept 2006 6.59
27-Sept 2006 Aug 2006 6.75
29-Aug 2006 Jul 2006 6.77
28-Jul 2006 Jun 2006 6.65
Jun 2006 May 2006 6.61
May 2006 Apr 2006 6.50
Apr 2006 Mar 2006 6.43
Mar 2006 Feb 2006 6.31
Feb 2006 Jan 2006 6.30
2005
Announcement Date Index Month Index Value
Jan 2006 Dec 2005 6.29
Dec 2005 Nov 2005 6.22
29-Nov 2005 Oct 2005 5.98
25-Oct 2005 Sept 2005 5.85
27-Sept 2005 Aug 2005 5.83
30-Aug 2005 Jul 2005 5.68
26-Jul 2005 Jun 2005 5.65
29-Jun 2005 May 2005 5.80
25-May 2005 Apr 2005 5.86
26-Apr 2005 Mar 2005 5.76
24-Mar 2005 Feb 2005 5.68
24-Feb 2005 Jan 2005 5.72
2004
Announcement Date Index Month Index Value
26-Jan 2005 Dec 2004 5.71
28-Dec 2004 Nov 2004 5.65
30-Nov 2004 Oct 2004 5.64
26-Oct 2004 Sept 2004 5.63
28-Sept 2004 Aug 2004 5.77
26-Aug 2004 Jul 2004 5.88
28-Jul 2004 Jun 2004 5.96
25-Jun 2004 May 2004 5.73
28-May 2004 Apr 2004 5.37
26-Apr 2004 Mar 2004 5.43
26-Mar 2004 Feb 2004 5.69
26-Feb 2004 Jan 2004 5.63
2003
Announcement Date Index Month Index Value
28-Jan 2004 Dec 2003 5.74
23-Dec 2003 Nov 2003 5.79
25-Nov 2003 Oct 2003 5.78
27-Oct 2003 Sep 2003 5.89
25-Sep 2003 Aug 2003 5.61
26-Aug 2003 Jul 2003 5.34
25-Jul 2003 Jun 2003 5.36
26-Jun 2003 May 2003 5.58
28-May 2003 Apr 2003 5.68
28-Apr 2003 Mar 2003 5.76
27-Mar 2003 Feb 2003 5.88
27-Feb 2003 Jan 2003 5.91
2002
Announcement Date Index Month Index Value
28-Jan 2003 Dec 2002 6.04
26-Dec 2002 Nov 2002 6.03
26-Nov 2002 Oct 2002 6.09
25-Oct 2002 Sep 2002 6.23
27-Sep 2002 Aug 2002 6.32
28-Aug 2002 Jul 2002 6.48
25-Jul 2002 Jun 2002 6.62
26-Jun 2002 May 2002 6.74
28-May 2002 Apr 2002 6.88
26-Apr 2002 Mar 2002 6.77
27-Mar 2002 Feb 2002 6.77
27-Feb 2002 Jan 2002 6.81
2001
Announcement Date Index Month Index Value
25-Jan 2002 Dec 2001 6.69
27-Dec 2001 Nov 2001 6.56
28-Nov 2001 Oct 2001 6.66
26-Oct 2001 Sep 2001 6.86
26-Sep 2001 Aug 2001 6.99
28-Aug 2001 Jul 2001 7.1
26-Jul 2001 Jun 2001 7.1
26-Jun 2001 May 2001 7.08
25-May 2001 Apr 2001 7.01
26-Apr 2001 Mar 2001 7.02
27-Mar 2001 Feb 2001 7.1
27-Feb 2001 Jan 2001 7.25
2000
Announcement Date Index Month Index Value
26-Jan 2001 Dec 2000 7.59
26-Dec 2000 Nov 2000 7.73
28-Nov 2000 Oct 2000 7.81
26-Oct 2000 Sep 2000 7.89
27-Sep 2000 Aug 2000 8
29-Aug 2000 Jul 2000 8.09
27-Jul 2000 Jun 2000 8.17
27-Jun 2000 May 2000 8.08
26-May 2000 Apr 2000 8
27-Apr 2000 Mar 2000 8.01
27-Mar 2000 Feb 2000 7.95
25-Feb 2000 Jan 2000 7.79
1999
Announcement Date Index Month Index Value
26-Jan 2000 Dec 1999 7.55
27-Dec 1999 Nov 1999 7.56
29-Nov 1999 Oct 1999 7.56
27-Oct 1999 Sep 1999 7.57
27-Sep 1999 Aug 1999 7.48
26-Aug 1999 Jul 1999 7.35
27-Jul 1999 Jun 1999 7.14
25-Jun 1999 May 1999 6.96
26-May 1999 Apr 1999 6.94
27-Apr 1999 Mar 1999 6.91
25-Mar 1999 Feb 1999 6.82
25-Feb 1999 Jan 1999 6.77
1998
Announcement Date Index Month Index Value
27-Jan 1999 Dec 1998 6.76
24-Dec 1998 Nov 1998 6.77
25-Nov 1998 Oct 1998 6.74
27-Oct 1998 Sep 1998 6.88
25-Sep 1998 Aug 1998 6.98
26-Aug 1998 Jul 1998 7.01
27-Jul 1998 Jun 1998 7.06
26-Jun 1998 May 1998 7.08
27-May 1998 Apr 1998 7.09
27-Apr 1998 Mar 1998 7.07
26-Mar 1998 Feb 1998 7.06
26-Feb 1998 Jan 1998 7.12
1997
Announcement Date Index Month Index Value
28-Jan 1998 Dec 1997 7.26
24-Dec 1997 Nov 1997 7.34
26-Nov 1997 Oct 1997 7.37
28-Oct 1997 Sep 1997 7.46
25-Sep 1997 Aug 1997 7.47
26-Aug 1997 Jul 1997 7.52
28-Jul 1997 Jun 1997 7.67
26-Jun 1997 May 1997 7.75
28-May 1997 Apr 1997 7.73
25-Apr 1997 Mar 1997 7.61
26-Mar 1997 Feb 1997 7.53
26-Feb 1997 Jan 1997 7.55
1996
Announcement Date Index Month Index Value
28-Jan 1997 Dec 1996 7.45
27-Dec 1996 Nov 1996 7.55
27-Nov 1996 Oct 1996 7.68
25-Oct 1996 Sep 1996 7.78
27-Sep 1996 Aug 1996 7.76
28-Aug 1996 Jul 1996 7.87
26-Jul 1996 Jun 1996 7.77
27-Jun 1996 May 1996 7.72
29-May 1996 Apr 1996 7.55
26-Apr 1996 Mar 1996 7.29
26-Mar 1996 Feb 1996 7.13
27-Feb 1996 Jan 1996 7.18
1995
Announcement Date Index Month Index Value
26-Jan 1996 Dec 1995 7.22
28-Dec 1995 Nov 1995 7.48
29-Nov 1995 Oct 1995 7.53
26-Oct 1995 Sep 1995 7.61
27-Sep 1995 Aug 1995 7.6
25-Aug 1995 Jul 1995 7.56
26-Jul 1995 Jun 1995 7.62
27-Jun 1995 May 1995 7.87
26-May 1995 Apr 1995 7.99
26-Apr 1995 Mar 1995 8.09
27-Mar 1995 Feb 1995 8
27-Feb 1995 Jan 1995 7.77
1994
Announcement Date Index Month Index Value
26-Jan 1995 Dec-94 7.75
27-Dec-94 Nov-94 7.56
29-Nov-94 Oct-94 7.6
25-Oct-94 Sep-94 7.57
27-Sep-94 Aug-94 7.59
25-Aug-94 Jul-94 7.49
July 26,1994 Jun-94 7.36
27-Jun-94 May-94 7.33
25-May-94 Apr-94 7.04
26-Apr-94 Mar-94 6.84
25-Mar-94 Feb-94 6.68
25-Feb-94 Jan-94 6.73
1993
Announcement Date Index Month Index Value
26-Jan-94 Dec-93 6.65
28-Dec-93 Nov-93 6.6
30-Nov-93 Oct-93 6.59
28-Oct-93 Sep-93 6.75
27-Sep-93 Aug-93 6.87
27-Aug-93 Jul-93 6.95
27-Jul-93 Jun-93 7.02
25-Jun-93 May-93 7.08
25-May-93 Apr-93 7.06
27-Apr-93 Mar-93 7.17
26-Mar-93 Feb-93 7.28
26-Feb-93 Jan-93 7.49
1992
Announcement Date Index Month Index Value
27-Jan-93 Dec-92 7.53
24-Dec-92 Nov-92 7.49
30-Nov-92 Oct-92 7.4
27-Oct-92 Sep-92 7.44
25-Sep-92 Aug-92 7.58
24-Aug-92 Jul-92 7.78
27-Jul-92 Jun-92 8.04
26-Jun-92 May-92 8.2
26-May-92 Apr-92 8.26
27-Apr-92 Mar-92 8.14
26-Mar-92 Feb-92 8.15
25-Feb-92 Jan-92 8.02
1991
Announcement Date Index Month Index Value
24-Jan-92 Dec-91 8.25
24-Dec-91 Nov-91 8.43
21-Nov-91 Oct-91 8.78
18-Oct-91 Sep-91 8.93
23-Sep-91 Aug-91 9.1
21-Aug-91 Jul-91 9.12
17-Jul-91 Jun-91 9.12
21-Jun-91 May-91 9.23
17-May-91 Apr-91 9.24
17-Apr-91 Mar-91 9.26
15-Mar-91 Feb-91 9.49
21-Feb-91 Jan-91 9.54
1990
Announcement Date Index Month Index Value
18-Jan-91 Dec-90 9.58
17-Dec-90 Nov-90 9.69
15-Nov-90 Oct-90 9.67
16-Oct-90 Sep-90 9.7
14-Sep-90 Aug-90 9.7
15-Aug-90 Jul-90 9.85
18-Jul-90 Jun-90 9.85
15-Jun-90 May-90 9.83
16-May-90 Apr-90 9.82
16-Apr-90 Mar-90 9.74
15-Mar-90 Feb-90 9.74
15-Feb-90 Jan-90 9.68
1989
Announcement Date Index Month Index Value
16-Jan-90 Dec-89 9.69
18-Dec-89 Nov-89 9.8
16-Nov-89 Oct-89 9.86
16-Oct-89 Sep-89 9.82
15-Sep-89 Aug-89 9.81
15-Aug-89 Jul-89 10.1
14-Jul-89 Jun-89 10.27
13-Jun-89 May-89 10.13
15-May-89 Apr-89 9.76
14-Apr-89 Mar-89 9.62
15-Mar-89 Feb-89 9.44
15-Feb-89 Jan-89 9.31
1988
Announcement Date Index Month Index Value
17-Jan-89 Dec-88 9.31
13-Dec-88 Nov-88 9.16
16-Nov-88 Oct-88 9.11
14-Oct-88 Sep-88 8.98
15-Sep-88 Aug-88 9
15-Aug-88 Jul-88 8.98
15-Jul-88 Jun-88 8.98
15-Jun-88 May-88 8.9
16-May-88 Apr-88 8.93
15-Apr-88 Mar-88 8.84
15-Mar-88 Feb-88 8.84
16-Feb-88 Jan-88 8.92
1987
Announcement Date Index Month Index Value
15-Jan-88 Dec-87 8.86
15-Dec-87 Nov-87 8.89
13-Nov-87 Oct-87 8.86
15-Oct-87 Sep-87 8.91
11-Sep-87 Aug-87 9.05
14-Aug-87 Jul-87 9.05
15-Jul-87 Jun-87 9.02
15-Jun-87 May-87 8.93
15-May-87 Apr-87 8.79
15-Apr-87 Mar-87 8.8
13-Mar-87 Feb-87 8.89
12-Feb-87 Jan-87 9.19
1986
Announcement Date Index Month Index Value
13-Jan-87 Dec-86 9.29
12-Dec-86 Nov-86 9.48
12-Nov-86 Oct-86 9.59
14-Oct-86 Sep-86 9.71
11-Sep-86 Aug-86 9.88
11-Aug-86 Jul-86 9.88
11-Jul-86 Jun-86 9.83
11-Jun-86 May-86 9.8
12-May-86 Apr-86 10
10-Apr-86 Mar-86 10.24
12-Mar-86 Feb-86 10.46
10-Feb-86 Jan-86 10.4
1985
Announcement Date Index Month Index Value
13-Jan-86 Dec-85 10.7
12-Dec-85 Nov-85 10.8
13-Nov-85 Oct-85 10.86
11-Oct-85 Sep-85 10.76
13-Sep-85 Aug-85 10.87
12-Aug-85 Jul-85 11.02
12-Jul-85 Jun-85 11.29
11-Jun-85 May-85 11.62
10-May-85 Apr-85 11.62
10-Apr-85 Mar-85 11.72
13-Mar-85 Feb-85 11.9
11-Feb-85 Jan-85 12.09
1984
Announcement Date Index Month Index Value
14-Jan-85 Dec-84 12.26
11-Dec-84 Nov-84 12.38
15-Nov-84 Oct-84 12.52
11-Oct-84 Sep-84 12.43
12-Sep-84 Aug-84 12.24
10-Aug-84 Jul-84 12.03
12-Jul-84 Jun-84 11.79
11-Jun-84 May-84 11.63
11-May-84 Apr-84 11.61
11-Apr-84 Mar-84 11.69
13-Mar-84 Feb-84 11.73
10-Feb-84 Jan-84 11.7
1983
Announcement Date Index Month Index Value
13-Jan-84 Dec-83 11.94
12-Dec-83 Nov-83 12.11
15-Nov-83 Oct-83 12.19
17-Oct-83 Sep-83 12.38
13-Sep-83 Aug-83 12.25
11-Aug-83 Jul-83 12.18
13-Jul-83 Jun-83 12.21
14-Jun-83 May-83 12.36
13-May-83 Apr-83 12.42
12-Apr-83 Mar-83 12.61
14-Mar-83 Feb-83 12.88
11-Feb-83 Jan-83 13.04
1982
Announcement Date Index Month Index Value
12-Jan-83 Dec-82 13.44
14-Dec-82 Nov-82 13.74
13-Nov-82 Oct-82 14.37
13-Oct-82 Sep-82 14.71
13-Sep-82 Aug-82 15.03
12-Aug-82 Jul-82 14.96
13-Jul-82 Jun-82 15.01
11-Jun-82 May-82 15.57
12-May-82 Apr-82 15.39
12-Apr-82 Mar-82 15.07
12-Mar-82 Feb-82 15.22
12-Feb-82 Jan-82 15.37
1981
Announcement Date Index Month Index Value
12-Jan-82 Dec-81 15.53
14-Dec-81 Nov-81 15.8
12-Nov-81 Oct-81 15.47
13-Oct-81 Sep-81 15.38
14-Sep-81 Aug-81 15.03
12-Aug-81 Jul-81 14.77
13-Jul-81 Jun-81 14.4
10-Jun-81 May-81 14.19
12-May-81 Apr-81 13.99
10-Apr-81 Mar-81 13.91
12-Mar-81 Feb-81 13.73
11-Feb-81 Jan-81 13.24
1980
Announcement Date Index Month Index Value
13-Jan-81 Dec-80 13.15
11-Dec-80 Nov-80 12.85
10-Nov-80 Oct-80 12.31
10-Oct-80 Sep-80 12
11-Sep-80 Aug-80 11.89
11-Aug-80 Jul-80 12.23
11-Jul-80 Jun-80 12.88
11-Jun-80 May-80 13.74
21-May-80 Apr-80 13.21
7-May-80 Mar-80 12.56
7-Apr-80 Feb-80 12.3
3-Apr-80 Jan-80 11.78

As per the Janet Yellen, we will see an increase in rates over the next 2 years. Be mindful when choosing your mortgage and by all means, please feel free to ask me any questions you may have about how this will affect your next home purchase, be it in Park Ridge, or any of the suburbs of Chicago.