Planning For Higher Interest Rates in the Long Beach Island Real Estate Market
- High Tides Digital Marketing
- Oct 23, 2021
- 3 min read
Preparing for LBI Real Estate Market Interest Rate Increases
All buyers, sellers, and current homeowners should begin planning for higher interest rates in the Long Beach Island real estate market. While nobody knows for sure what the future of interest rates will be, most experts in the industry agree that rates will increase over the next few months and years. While this in itself should not be the sole motivator to enter into an LBI real estate transaction, it should be considered in your short and long-term planning. With rates being so low at present, making a move in the current climate can make a lot of sense. There are a few options available to buyers, sellers, and homeowners that they may want to consider before rates increase. They are:
Buy a home now and take advantage of the current rates
Sell a home and upgrade or downsize
Refinance your current home on LBI and lock in a lower rate
Planning For Higher Interest Rates in the Long Beach Island Real Estate Market
Of course, the most obvious advantage in a low-interest-rate environment is a buyer's ability to purchase a home with a lower monthly payment. Lower interest rates have helped to motivate many buyers and have helped offset the higher prices we see in the LBI real estate market. As rates go up, the cost of owning a home on Long Beach Island will go up as well. Of course, there is a chance that higher rates will cause prices to drop, but this is a rather unlikely scenario, at least in the short term. The LBI real estate market is not that sensitive to mortgage rates in either direction, and there is still a significant disparity between the buyer demand and the supply of homes. Therefore, if interest rates on LBI go up 0.25% or 0.5%, it is doubtful that prices will change. The only impact will be paying the same price for a home but having a higher monthly payment. This scenario applies to current homeowners as well that are considering buying a larger or smaller home. A higher interest rate will only limit the ability of a homeowner to buy a larger home and/or reduce the advantage of purchasing a smaller home. If you have not done so already, all LBI homeowners can and should take advantage of the lower rates to refinance now, as there is a much higher probability of rates going up than of them going much lower. In conjunction with this, if a homeowner is not interested in refinancing or does not have a loan, it may make sense to establish a line of credit in case of an emergency and take advantage of the current interest rate environment LBI real estate market.
Preparing for LBI Real Estate Market Interest Rate Increases
There is a lot of data to support these conclusions, but there is no way to say for sure, even with supporting evidence. Nobody knows what the future holds for interest rates or home prices in the LBI real estate market, but most agree that prices will continue to rise for the next few years, and interest rates will increase as well. That said, there is a genuine opportunity right now for buyers, sellers, and homeowners alike, and it is an opportunity that should, at a minimum, be evaluated. If you have any questions about buying, selling or investing in the LBI real estate market, please do not hesitate to contact me.
By : Nathan Colmer | LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
