Understanding How National Events May Impact Interest Rates and The LBI Real Estate Market
Interest Rates on Long Beach Island NJ
The LBI real estate market, like all real estate markets, is influenced by interest rates. Generally speaking, the higher the interest rates climb, the “less” house buyers can afford. At present, interest rates have seen some increases but are still at historically low rates thus allowing and incentivizing buyers in the LBI real estate market to enter into a Long Beach Island NJ real estate transaction. Regardless if you are a buyer or seller in the LBI real estate market, it is important to monitor both the current trends in the LBI real estate market and interest rates nationally to make sure your investment is secure. There are currently several Important Events That May Impact Interest Rates on Long Beach Island NJ and the LBI Real Estate Market and to better understand them can help you when investing in the LBI real estate market.
Important Events That May Impact Interest Rates on Long Beach Island NJ and the LBI Real Estate Market
As we enter into the final quarter of 2013, there are some important event occurring that should be monitored and understood as we move towards 2014. These events go a long way to influence the federal government’s reaction to interest rates.
- Federal tapering
- National real estate market upswing
Federal tapering has been in the news for over a year as the federal government’s decision to purchase $85 billion in bonds per month has been designed to help both the economy and the housing market. This bond buying includes mortgage backed security to which home loan rates are directly tied. This continued buying has helped keep home loan rates attractive and has contributed to activity in the LBI real estate market. The federal government has announced that it will continue to purchase at the same rate (rather than taper which was the expectation of many). This continued buying should help keep home loan rates attractive to buyers in the LBI real estate market on Long Beach Island.
The national housing market has continued to improve even in spite of some increases in national home loan rates. Housing starts rose 0.9% from July to August 2013 and the increase in sales activity was noticeable on Long Beach Island as well with more homes selling in August 2013 as compared to July 2013. Even more telling was the 12.4% increase in home prices from July 2013 to July 2012. This marks the 17th month over month increase in home prices nationally! While home prices on Long Beach Island do not reflect such large increases, the average sales price has been consistent or higher than 2011 and 2012 showing strength in the LBI real estate market as well.
Inflation remained manageable as the Consumer Price Index in August came in below expectations and was in fact lower than July. Inflation is directly tied to interest rates both nationally and on Long Beach Island as inflation reduces the value of “safer” investments such as bonds. The lower inflation levels have allowed the Federal government to continue with the bond purchase that are helping to keep interest rates in the LBI real estate market and nationally attractive to buyers.
Understand the Current Trends with Interest Rates and the Long Beach Island NJ Real Estate Market
Home mortgage rates continue to be very attractive to buyers in most cases. It is important to remember that regardless of the publicized interest rate, the individual’s credit score, income and current debt will have an impact on the actual interest rate paid so it is important to speak with a lender prior to beginning your search for a home in the LBI real estate market. Regarldess if you are buying or selling on Long Beach Island, it is of vital importance to understand Important Events That May Impact Interest Rates on Long Beach Island NJ and the LBI Real Estate Market as these events will have a direct impact on your LBI NJ real estate investment. For more information about interest rates, the Long Beach Island NJ real estate market or flood insurance on LBI please do not hesitate to contact me, Nathan Colmer, and I will be happy to help!
Nathan Colmer | The Van Dyk Group
Cell: 609.290.4293 : Toll Free: 800.222.0131 : Email: email@example.com
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