Rainbow Springs Villager - Page 19

April 2018 Rainbow Springs Villager 19
Rising Interest Rates and Their
Effect on Home Buyers
By Joe Renda & Traci Spangler
Higher wage growth, strong economic indicators, and
strong corporate earnings are leading to higher interest
rates in 2018. Interest rates have traditionally been called
the barometer in which investors measure the profitably of their investment,
especially when talking about real estate. They are not always the determining
factor when deciding to purchase or sell a home. In fact, raising interest rates
may not directly affect mortgage interest rates at all.
Buyers who have been waiting to buy homes are embarking on the journey
to home ownership hoping interest rates don’t rise further. So, there may be
fewer existing homes on the market. This also means that if the existing home
inventory is exhausted, new home construction will also show an improvement.
Finding property is just one aspect to understand when talking about the effects
of rising interest rates on the housing market.
It is important to also understand the relationship between rising interest
rates and inflation. You see, inflation is the catalyst that drives interest rates up.
Essentially, when interest rates rise, property value declines, but when you add
the inflation factor in, the picture changes. Inflation raises because of favorable
economic indicators, this means that the value of property also increases. Thus,
if the increase in property value outweighs the decrease caused by the interest
rates, the effect will be positive overall. Real estate then becomes one of the
most desired investments during times of inflation because of it’s resilience.
Many banks often look for programs who have higher loan maximum limits to
accommodate the higher interest rates and help those who qualify for programs
through Freddie Mac, Fannie May or first time home buyers.
Tax deductions are also considered in conjunction with inflation and interest
rates when making the decision to buy or sell homes. In December 2017, the tax
bill that was passed included a new cap on the mortgage deduction and a new
cap on state and local deductions. This could mean that desirable areas such as
coastal regions could see a drop in home prices.
If you are looking into the options of buying or selling a home let the
professionals at SellState Next Generation Realty walk you through each step.
They understand the correlation between inflation and interest rates. They
understand the recent tax bill and how it will affect the housing market in our
area. It is important that you look toward realtors that are intimate with the
area where your investment is because each area will adapt to these changes at
different rates.
SellState Next Generation Realty expertly incorporates both traditional and
technological strategies when marketing homes or attracting buyers. Each
listing is treated to a personal website that highlights the home and property.
They create a one of a kind video made using a drone which allows for buyers
to get an intimate perspective of the home. SellState Next Generation Realty
office is at 20093 East Pennsylvania Ave, Suite 1, Dunnellon, FL 34432. Call
Joe Renda (352) 470-0563 or Traci Spangler (352) 362-2423 to schedule an
appointment or visit their website www.realestatedunnellon.com to see their
current listings. Facebook and YouTube are social sites where you can view
videos and find more information about listing in the Dunnellon area too.
1,895 SF
19021 SW 101st Place
2,797 SF
8177 SW 196th Court Road
480 SF
20800 River Drive, A21
Traci and Joe pride themselves on listening
to their customers. As 30 year residents
they know the area and will develop an
aggressive marketing approach to get your
home sold.
Ready to Sell Your Home?
Call Joe (352) 470-0563
Traci (352) 362-2423
20093 E. Pennsylvania Ave, Suite 1
Dunnellon, FL 34432


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