Okay, this is beginning to get a little hard to follow. In a column that appeared yesterday, I pointed out that recent comments from Fed Chair Janet Yellen didn’t exactly jibe with comments made by Philadelphia Federal Reserve Bank President Charles Plosser. First, in one of Yellen’s presentationswhere are rates headeed to a Congressional Committee

she made it clear that the Fed will accommodate the economy and not raise rates if the Fed thought it would slow the economy down or reverse our meager gains over the past few months along with statements that the Fed wouldn’t even consider raising anything until at least six months after the current QE program ends later this fall. Then, Plosser clearly states the rate increases may come sooner rather than later.

Today, the latest set of FOMC minutes was released. In the minutes, the Fed did discuss specific procedures regarding rate hike procedures but stated that any rate action would come anytime soon. That sounds like no rate hikes at least until next year. What does all this do for the real estate investor and home buyers in general?

It doesn’t provide very much guidance and while mortgage rates are very important to the real estate investment industry. Lower rates can mean greater monthly cash flow. Lower rates mean more buyers can afford to buy a home. If you’re renting out a property or wanting to flip, both matter.

But it’s still a murky situation. Is there any advice? Probably not but if you’re making a decision about when to buy or build a rental property, an interest rate move shouldn’t be your deciding factor. If the deal makes sense, it makes sense. Yet let’s be clear on what “raising rates” might really mean. We’re in the low 4.00 percent range for the 30 year product today and while 5.00 percent might seem stratospheric, it’s nothing compared to what we’ve experienced over the past few decades. In fact, 5.00 percent is still a steal.