The Fed wrapped up its most recent two-day FOMC meetings and Wall Street waited for the standard post-meeting comments as few expected any increase in the Fed Funds rate at this time. The prepared comments mentioned economic activity was expanding although at a “moderate” pace. There wasPrivate Money Investment no clear indication of when the Fed would begin raising rates although there really never is.

The Fed will never say something to the effect of, “We’re going to raise the Fed Funds rate at our December meeting by 50 basis points” for example.

Yet so far, financing costs for real estate investors have risen by nearly that amount. According to Freddie Mac’s most recent mortgage survey, the rate for a 30 year fixed conforming loan for a non-owner occupied property is around 4.25% whereas earlier this year the rate was closer to 3.875%. Mortgage bonds and Treasuries alike have seen their yields rise over recent weeks, as investors sell bonds and move into equities. The Fed has kept the rates near zero for seven years straight.

Continued strong demand for housing along with lower inventory is pushing median home values up in most metropolitan areas and combined with an increased demand for rental housing, real estate investors are still in a “sweet spot.” Wall Street has been trading in a relatively tight range with the Dow still hovering around the 18000 mark. The tech-heavy NASDAQ topped a mark last seen 15 years ago again primarily due to the dovish comments made by the Fed yesterday.