The global Coronavirus (COVID-19) is sneaking its way across the globe and infecting people, the global supply chain, and key manufacturing companies in key nations like China and South Korea. The virus has worked its way into the minds and opinions of investors and is causing the economic markets around the globe to slide downward.

We have had three cases of the Coronavirus verified in Oregon over the last week (Read about it here), and all of them were with individuals that never traveled to other countries. It’s here, and it’s persistent, to say the least.

This fear across the globe is making investors nervous. In conditions like these, the Federal Reserve takes measures to increase investor confidence and spur spending to help support the US economy and stabilize the stock market in uncertain trading times. We have been experiencing one of those periods in the US economy over the last week.

Remembering back to the Summer of last year, there was a huge focus on interest rates and why the US Federal Reserve kept dropping the “Target Rate” what seemed like every month (it wasn’t every month, but it seemed like it). Our friends at Investopedia put out a great article titled “How Interest Rate Cuts Affect Consumers“ that has solid information to help you understand how and why the FMOC uses the target rate to speed up and slow down the US economy and ultimately affect global markets.

The author of the Investopedia.com article, Dr. Tisa Silver-Canady said,

“The Fed lowers interest rates in order to stimulate economic growth. Lower financing costs can encourage borrowing and investing.”

 DR. TISA SILVER CANADY: 7/31/19; Investopedia.com

Well at 7:00 am PST today, the US Federal Reserve Board lowered the target interest rate another 1/2 of a percent. You can read the FOMC statement for yourself here. The new target rate will go into effect tomorrow.

Bloomberg.com reported last month how the pervasiveness and uncertainties regarding the spread of the Coronavirus, and our ability to combat it, would affect investors and the global economic markets. Vivien Lou Chen quoted Tony Farren, saying,

“The impact of the virus on the global economy is going to be significantly more than what people are expecting, and when the global economy goes south, the Fed steps in,”

 Vivien Lou Chen; February 15, 2020; Bloomberg.com

Well, the Fed has stepped in again lowering the target rate to speed up spending and increase investor confidence in the US Stock Market and to slow the slide we are presently seeing as stocks are unstable moment to moment this past week. It’s been crazy, but this is the amazing way our economy works, and it is fascinating how opinions and feelings can affect the markets. But when a solid policy turn by the Federal Reserve saves us money, we just feel better and we take advantage of the situation.

So, here’s how you can take advantage of the new lower target rate. If you have been kicking around a refinance or a HELOC to get that extra cash in your pocket, now may be the time. You could lower your monthly mortgage payment or possibly get available cash out of your equity for that remodel or update. We don’t ever recommend trying to time the market, so taking this opportunity to make your move and secure these savings may be a good move. Every financial situation is different, so you should check with your financial advisors to see how your plan is being affected by this new FMOC policy announcement.

The housing market is at a stable and maintaining position this month. If the Coronavirus keeps on moving across the globe (which is probable), it could cause global economic markets to respond. If the virus fears continue, the instability of the stock market may possibly affect housing prices as people may have less available money to spend on homes and investors see fewer returns on 401K’s, IRAs, and Index Funds.

Asking the refinancing question now, or discussing your HELOC options with your mortgage or banking professional will be a good conversation to have this week as things shift and adjust to the new Federal Rate announcement from this morning.

We are here to help you make connections with those professionals in your area if you do not already have those connections. Just call or text us and we can help you make those connections.

Cheers,

Michael Jester
Oregon Licensed Real Estate Broker
My Real Estate Advisor Team
(503) 799-8354 cell
(503) 437-9005 office
michaelj@myreateam.com

Bella Casa Real Estate Group
207 NE 19th Street, Suite 100
McMinnville, OR 97128
(503) 437-9005 office
https://thebellacasagroup.com