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In the debate over interest rate projections, I watched both YouTubers, Peter Zeihan and Brian Kim about the Fed Funds Rate future directions. Let’s break it down and I’ll add my own home buying advice that will protect you regardless of how the mortgage rate changes in the future.
Peter Zeihan’s Take:
Prediction: Expects the Fed to hike the Fed Funds Rate.
Recommendation: Urges borrowing sooner rather than later, citing rate increase.
Reasoning:
- Points to inflation not coming down to the Fed’s 2% target, signaling a need for corrective action.
- Highlights a capital flight from Wall Street, potentially with inflationary pressures.
- Bottom Line: Zeinhand’s advice? Borrow now to beat the rate hike.
Brian Kim’s Perspective:
Prediction: Anticipates a rate cut within the next two years.
Reasoning:
- Believes the Fed will prioritize stable job and recession prevention.
- The Fed will likely intervene if unemployment exceeds 4%, likely resulting in rate cuts.
Bottom Line: Kim’s outlook offers hope for borrowers, hinting at potential relief on the horizon.
Shawn Realty’s Guidance:
- Wisdom: Advocates for decisive action irrespective of rate projections.
- Advice:
- Encourages opting for a stable 30-year fixed loan over adjustable-rate mortgages.
- Emphasizes the importance of staying active in the market and avoiding procrastination.
- Takeaway: Seize the moment and secure your home in the housing market now if you can afford at the current 7% mortgage rate. If the rate goes to 8% next year, you’d be happy that you bought at 7%. If the rate goes to 6%, you can go ahead and refinance. You’ll be glad that you now own a home in 2024 and started building equity, enjoying the house and saving rent money!
Shawn Realty 