Austin Statistics: April 2011

In reviewing the month of April, it’s a mixed bag. Austin is continuing to see an upward pressure on closed sales transactions but the volume is off by 22%. There is much in the economy that gives buyers and seller’s pause, but a recent article I read on the Wall Street Journal (April 7, 2011) is something to consider. The housing industry has benefited for some time from historic lows in interest rates; I feel that consumers assume they will remain as such. Jeffery Lacker of the Federal Reserve recently stated that “inflation risks during the past six months have “picked up,” having increased “appreciably”. If the Fed has to tighten their monetary policy, interest rates may increase. If mortgage interest rates increase, buyers will lose buying power, hence putting new pressure to reduce the price of a home. We may be coming to an end of the historic low interest rate.