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How do Federal Reserve decisions impact mortgage rates?

Don’t panic, recent increases not as dire as some fear

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Will the increased rates mean fewer buyers? Not necessarily.

Recently, the real estate market has been incredibly active. In many neighborhoods, it seems that a for sale sign is scarcely placed in the front yard before multiple offers, even some above asking price, roll in. In many cases, this was made possible by relatively low mortgage rates, which enticed buyers to get into the market and make those offers. Recently, however, there have been concerns about the state of the economy and increased inflation – furthered by the recent news that the Federal Reserve has raised interest rates.

This increase has understandably left many potential homebuyers wondering – what does this mean for mortgage rates, and my ability to obtain the loan I need to purchase a home? It has also left sellers asking – will the increased rates mean fewer buyers? Will it be harder to sell? These are important questions to ask. While no one has a crystal ball, many remain hopeful that the real estate market will continue to thrive. Let’s take a closer look at why together.

The Federal Reserve – Why it Matters

The Federal Reserve is the central bank of the United States, and among its many functions, it essentially guides the national economy. Part of that mission is keeping inflation under control. Recently, in an attempt to slow ever-increasing inflation, the Federal Reserve raised short-term interest rates by half a percentage point. Short-term interest rates are essentially the interest rates that banks charge one another for short-term loans.

It’s been some time since the Federal Reserve has made a move of that nature – slightly more than 20 years in fact, with the last such increase occurring in 2000. The Fed also indicated that more adjustments may be planned before the end of the year. Certainly, this raises the question – what does this mean for mortgage rates?

Federal Interest Rates Vs. Mortgage Rates

It’s important to understand that the Federal Reserve does not actually set mortgage rates – there is in fact no such thing as a “federal mortgage rate.” Ultimately, the decisions of the Federal Reserve don’t directly impact mortgage rates in the same manner as with other products, like savings accounts or CDs, for example. Mortgage rates generally respond both to the actions of the Federal Reserve, as well as to the general movement of both the United States and global economies, so there are many factors to consider.

Nevertheless, those in the mortgage industry do closely monitor the actions of the Federal Reserve, and certainly, how much buyers pay for a home loan is influenced by those decisions. As a very rough rule of thumb, for every one point increase by the Fed, your buying power goes down by $100,000.

When the Federal Reserve makes it more expensive for banks to borrow by setting a higher federal funds rate, the banks typically pass on those higher costs to their customers. This ultimately means that interest rates on consumer borrowing, which includes mortgage rates, tend to go up.

Keeping it in Perspective

While any increase in mortgage rates may not be welcome news for buyers, it’s important to keep these increases in perspective. Historically, the current interest rate, which is around 5 to 6%, depending on whether you have a 15 or 30-year mortgage, is still very low and very favorable for buyers. At the end of the 1970s, for example, interest rates were hovering near 10%, only to ultimately reach an all-time high of about 16.5% in 1981 before eventually decreasing. Throughout the 1980s, however, mortgage interest rates remained near 10% – nearly twice what they are today.

Another potential silver lining is that increased rates may also mean increased inventory – which is certainly good news for buyers. While rates are still historically very low, the increase may nevertheless mean that there are more available homes to choose from, as the number of buyers in the market decreases overall. This could be a refreshing change of pace for those buyers who felt that they had minimal choices in a highly competitive market.

While this may not be the most welcome news for sellers, it’s not necessarily bad news either. As rates are still relatively low, there will still likely be plenty of potential buyers out there. When the present market is compared to the course of the real estate market over the last several decades, now is still an excellent time to sell.

At GayRealEstate.com, we are passionate about helping LGBTQ home buyers and sellers through every aspect of the real estate process – and that includes more than just buying and selling. It also includes addressing the important issues in the real estate market that matter to you the most. We believe in the importance of connecting LGBTQ buyers and sellers with talented and dedicated agents who can help. We also believe in ensuring that our clients feel informed, prepared, and knowledgeable about all aspects of the real estate process. You deserve nothing less. Whatever your real estate needs, we’re here to help.

Jeff Hammerberg is founding CEO of Hammerberg & Associates, Inc. Reach him at 303-378-5526 or [email protected].

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Real Estate

Totally radical home buying

We should celebrate advancement of homeownership rights

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The phrase “totally radical” came of age in the 1980s and was defined as cool, wonderful, or awesome. Its synonym, wicked, can be found in nearly all Ben Affleck movies and a cry of “Excellent!” will bring back memories of an adventure had by Bill (Alex Winter) and Ted (Keanu Reeves) in 1989.

Although some people are not ready for cocooning yet, homeownership is still a cornerstone of financial strength and wealth building. For LGBTQ individuals, owning a home can provide a sense of economic security and a sanctuary where they can express their personalities freely and without fear of discrimination or harassment. 

Whether house, condominium, or cooperative apartment, owning a place to chill allows you to build a legacy and provide for future generations. It offers the stability needed to plan for the future, whether that involves raising a family, supporting aging parents, or ensuring a spouse’s or partner’s financial security.

Homeowners are also more likely to invest in their communities, fostering strong, inclusive, bitchin’ neighborhoods. For many LGBTQ people, a home is “In the District,” which prides itself on diversity. Homeownership allows individuals to create personal spaces that reflect their identities and values, contribute to the city’s rich cultural tapestry, support local businesses, and participate in community events and governance.

The journey toward homeownership for gay individuals has evolved over the years, reflecting broader societal changes and the struggle for LGBTQ rights. The stark contrast between the ’80s and now highlights the progress made, the challenges that still exist, and future uncertainties brought forth by the space cadets in our political system. 

In the 1980s, homeownership for gay people was bogus. The decade was marked by lame, pervasive discrimination and limited legal protections. The HIV/AIDS epidemic further stigmatized the gay community, intensifying societal prejudices. This climate of fear and hostility permeated various aspects of life, including the housing market.

Gay individuals faced overt discrimination from landlords, real estate agents, and mortgage lenders, even in the rental market. It was not uncommon for same-sex couples to be denied housing simply because of their sexual orientation. Even in the late ’90s I had clients looking for homes in Prince William County, Va., who had to hightail it out of an open house when told to take a hike. I kid you not!

Financial institutions were often unwilling to grant mortgages to same-sex couples or openly gay individuals. When they did, the terms were often less favorable than those offered to heterosexual couples. This made the dream of homeownership significantly harder to achieve, even though DINKs (dual income, no kids) tended to have more household income than so-called “traditional” families.

Additionally, the lack of legal recognition for same-sex relationships posed harsh challenges. Without the ability to marry, same-sex couples faced difficulties in co-owning property and ensuring that their partner had legal rights to the home. Estate planning was complicated, as inheritance laws did not recognize same-sex partners, potentially leading to the loss of a home upon a partner’s death.

The landmark Supreme Court decision in Obergefell v. Hodges, which legalized same-sex marriage nationwide, was a fantabulous moment. This ruling provided same-sex couples with the same legal rights as heterosexual couples, including the ability to jointly own property and inherit without complication.

Anti-discrimination laws have also evolved. The definition of sex under the Federal Fair Housing Act has been expanded to include sexual orientation and gender identity, as have protected classes in Maryland and Virginia. The District has taken that a step further; our protected classes also include gender expression and personal appearance. 

Organizations like the DC Center for the LGBT Community and the National Association of Gay and Lesbian Real Estate Professionals (NAGLREP) offer resources and advocacy for LGBTQ+ homebuyers. These organizations provide educational workshops, networking opportunities, and support to navigate the housing market.

The advancement of homeownership rights for gay people is a testament to the righteous resilience and determination of the LGBTQ+ community. As society continues to strive for equality, it is essential to address the remaining challenges to ensure that everyone, regardless of their sexual orientation or gender identity, can achieve the goal of homeownership.

In 2024, the only limitations on owning a home are finding one and being able to afford it. Pride weekend is a great time to go to open houses. You’ll probably be walking right by several. 

But if you’re not ready yet and just feel like getting your ’80s jams on, grab your disco balls and check out the Totally Tubular Festival at The Anthem at The Wharf on July 14.I’ll be Desperately Seeking Susan and will, as they used to say in the ’70s, catch you on the flip flop.

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Real Estate

Decorating tips for Pride in D.C.

Perfect time to add a dash of creativity to your living space

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Hang your Pride flag and other LGBTQ-themed décor this Pride month. (Washington Blade file photo by Daniel Truitt)

As the vibrant LGBTQ community in Washington, D.C., gears up for the much-anticipated Pride celebrations on June 8 and June 9, it’s the perfect time to add a splash of color and a dash of creativity to your living space. Normally, I know you’re used to reading more educational and serious articles in this space. In the spirit of D.C. Pride this year, I thought a bit of levity would be welcomed.

Whether you’re in a cozy condo, a spacious home, or a rental apartment, here are some fabulous ways to zhuzh up your indoors and outdoors with Pride-themed décor. 

Indoors: Celebrate with Style

1. Colorful Accents Everywhere

Transform your living area into a festive space by incorporating the colors of the rainbow. Here’s how:

• Throw Pillows and Blankets: Swap out your regular throw pillows and blankets for those in bright, rainbow colors. This simple change can make your space instantly feel more festive.

• Pride Flags: Hang LGBTQ Pride flags on your walls or in your windows. The traditional rainbow flag is a staple, but also consider including other flags like the bisexual, transgender, or pansexual flags to celebrate the diversity of our community.

• Art and Posters: Display Pride-themed art or inspirational quotes from LGBTQ+ icons. Local artists often have prints and posters that reflect the spirit of Pride.

2. Light It Up. Lighting can set the mood for any celebration:

• Fairy Lights: Drape rainbow-colored fairy lights around your living room or bedroom for a magical touch.

• LED Candles: Use multi-colored LED candles to safely add a warm glow to your space.

3. Tabletop Décor. Celebrate at every meal with:

• Tablecloths and Runners: A vibrant rainbow tablecloth or runner can turn every dining experience into a celebration.

• Centerpieces: Create centerpieces with flowers in hues of the rainbow, or use colorful glass bottles as vases.

4. DIY Pride Crafts. Get creative with DIY decorations:

• Rainbow Paper Chains: Make paper chains in rainbow colors and hang them across your rooms.

• Pride Mason Jars: Paint mason jars in rainbow stripes and use them to hold utensils or flowers.

Outdoors: A Festive Façade

1. Balcony or Patio Pride. If you have outdoor space, make it a part of the celebration:

• Rainbow Banners and Streamers: Decorate your balcony or patio railings with rainbow banners and streamers.

• Outdoor Flags: Fly a large Pride flag from your balcony or in your garden.

2. Welcoming Door Décor. Your front door can be a bold statement of support:

• Pride Wreath: Create or buy a wreath featuring rainbow colors or themed around different LGBTQ+ flags.

• Welcome Mats: Greet visitors with Pride-themed welcome mats.

3. Garden and Window Dressings. Let your garden or exterior windows echo your Pride:

• Window Decals: Use removable rainbow decals to decorate windows facing the street.

• Garden Flags: Place small rainbow or other LGBTQ+ flags throughout your garden or in plant pots on your porch.

4. Lighting the Night. Make your outdoor space shine:

• Solar Rainbow Lights: Use solar-powered lights in Pride colors to illuminate pathways or garden borders.

• Projection Lights: Project rainbow patterns or Pride flags onto your home’s exterior.

Community Engagement

1. Share the Spirit. Decorate your shared spaces if you’re in an apartment building:

• Bulletin Boards: Put up colorful notices or flyers announcing local Pride events.

• Community Areas: If possible, decorate communal areas with small flags or posters.

2. Local Pride. Support local LGBTQ businesses by buying decorations or craft supplies from them. This not only helps the community but also promotes local artists and crafters.

Safety and Considerations

• Check with your landlord or HOA: Before hanging decorations outside or in shared areas, make sure to check if there are any restrictions.

• Be Mindful of Neighbors: While celebrating Pride, ensure your decorations are respectful and mindful of your neighbors.

By decorating your home for Pride in Washington, D.C., you’re not just brightening up your living space; you’re showing your support and solidarity with the LGBTQ community. Let your Pride shine brightly, and make this year’s celebrations unforgettable!

Scott Bloom is owner and senior property manager, Columbia Property Management. For more information and resources, visit ColumbiaPM.com.

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Real Estate

Looking for vacation homes during Memorial Day weekend

A busy, strategic time in the housing market

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As summer arrives, more tourists begin thinking of buying in resort towns like Rehoboth Beach, Del. (Washington Blade file photo by Michael Key)

Memorial Day weekend, a time to honor the sacrifices of the men and women of the U.S. Armed Forces, also marks the unofficial start of summer. Beyond its significance as a day of remembrance, it has become a prime period for the real estate market. The long weekend provides a unique opportunity for home buyers and sellers, making it one of the busiest and most strategic times in the housing market.

Memorial Day weekend is often a time when people head to the beach, the country, or the mountains for relaxation and to join in the local festivities. This long weekend offers a break from routine, a chance to honor those who have served, and an opportunity to enjoy the beginning of warmer weather. 

For real estate agents, however, Memorial Day weekend can be a blend of work and leisure, especially in resort communities where the real estate market is particularly active during this time. 

The influx of visitors to these destinations often includes prospective buyers who are considering purchasing vacation homes or investment properties. As a result, real estate agents in these areas might find themselves balancing work commitments with personal downtime.

We are keenly aware that the long weekend brings a surge in potential clients. Agents joke among themselves about business being slow until they make plans to go out of town. Open houses and community home tours are often scheduled to coincide with the holiday, taking advantage of the increased foot traffic.

Due to constantly improving technology, real estate agents can effectively manage their time and resources even during busy holiday weekends. Virtual tours, online listings, and digital marketing campaigns enable agents to reach a broad audience without always being physically present. Technology also allows agents to stay connected with clients and respond to inquiries promptly, ensuring that the clients do not miss out on potential sales opportunities. 

Often, agents licensed in the DMV are expanding their territories by becoming licensed in West Virginia, Pennsylvania, and Delaware. Writing offers while on vacation has become the norm. Social media accounts can highlight special listings and open house events, and agents can also post pictures and descriptions of amenities in the towns they are visiting, attracting interested buyers who are in the area for the weekend.

The vibrant atmosphere of vacation getaway towns during Memorial Day weekend also provides a unique opportunity for networking and relationship-building. Agents can meet potential clients in a casual setting, forging connections that might lead to new business opportunities. They can also form relationships with other agents and create partnerships to help current and future clients find leisure homes.

The appeal of owning a place by the water, for example, is often strongest during the summer months, when the weather is inviting and the potential for rental income is high. Real estate agents who serve beach towns such as Ocean City, Md., Virginia Beach, Va., or Rehoboth Beach, Del., often mix business with pleasure as they seek out new clients.

Alternatively, if the relaxed life in the country is more to your liking, places such as The Amish area of Lancaster County, Pa. may be for you. Charles Town, W.Va., and Ashland, Va. have a robust military history and may be what you’re looking to enjoy. If mountains and lakes are more your style, the Blue Ridge mountains of Virginia, the Appalachians of West Virginia, or Deep Creek Lake, Md., may fit the bill, so let’s look at a few properties on the market today.

In Ocean City, you can find an oceanfront, one-bedroom condominium with beach and sunset views in a short-term rental building for $439,900. As you can imagine, it already has four weeks booked for the summer.

The historic district of Charles Town, W.Va., offers a 3,000-square-foot Victorian home built in 1890. It has five bedrooms, two bathrooms, 10’ high ceilings, original pocket doors, inlaid floors, and central air conditioning for $159,900. What’s the catch? It requires a complete renovation, but what a wonderful project it could be for weekend warriors.

Stretch your budget a bit more and you can own a 4,000-square-foot chalet with mountain views on both sides in Front Royal, Va. For less than $700,000, you will get four bedrooms and three baths, nearly two acres of land, and low-maintenance siding.

While many people flock to nearby vacation spots purely for relaxation, real estate agents often find themselves working diligently to learn about different areas and capitalize on the increased interest in local properties. By doing so, they can help clients find their dream homes, whether for retirement, short getaways, or investment potential.

Valerie M. Blake is a licensed associate broker in D.C., Maryland, and Virginia with RLAH Real Estate / @properties. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs.

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