Looking for a deal? Interest rates are hogging the headlines, but guess what? There's a whole lot more to the story. Let's dive into three crucial factors that go beyond - and even shape - rates. The last one will surprise you.
1. Inflation Rates: Inflation talk might not be the most thrilling, but it is important. Why? Because it determines interest rates. How? Here's the deal – the Federal Reserve has routinely shared that they will not stop raising interest rates until inflation hits 2% again. As of August 2023, inflation has been hanging around 3%. This means we still have some way to go. Keeping a close eye on inflation is vital because it directly influences interest rates, mortgage rates, housing affordability, and overall market dynamics.
[Additional reading: Unpacking Decades of Interest Rates].
2. Home Values: When the cost to borrow money goes up, the value of the things (assets) tends to go down. And, when interest rates climbed, home sales prices did cool off a bit. But when rates plateaued, the values didn't just stay put; they even went up. How cool is that? Since January, we've seen a modest 1.2% increase in the value of homes in the Louisiana Gulf South region, including here in New Orleans. And guess what? Even after the recent interest rate hike, they've only dipped slightly. The real deal today isn't waiting on interest rates, my friends. It's about securing your dream home before it costs you even more!
3. Baby Boomers: Keep an eye on Mom and Dad – they're not following in Grandma and Poppop's shoes. The 59+ generation isn't into hoarding cash and sitting on a beach chair. They're taking their hard-earned cash - and their inheritance - and putting their money into tangible assets, like real estate. After all, it's a lot more fun to buy or build that dream house, get that vacation property, or invest in a home that helps your kids get ahead than purchasing an annuity. Come Christmas, more and more Millenials and Gen Zers will be asking for a 5% mortgage from the bank of Mom and Dad.
[Additional reading: Shake It Off: Downsizing Tips to Thrive at 59+]
To sum it all up, these three indicators are way more than just background noise. Inflation rates are tied to interest rates; we're not out of the rate-hike-woods yet. Home values are holding steady and even climbing, making now the time to lock in that sweet deal. And our groovy elders are shaping the market, investing in real estate for themselves and their loved ones.
Stay informed, stay savvy, and remember – when it comes to real estate, we at Team Cool Murphy know knowledge is power! Happy house hunting, my friends! 🏡
Voted Neighborhood Favorite by Nextdoor, Team Cool Murphy is a top-producing, licensed real estate team based in New Orleans, brokered by Cool Murphy, LLC.
Celebrated for her next-level creative approach to real estate, Elisa Cool Murphy is an award-winning, top-performing agent in New Orleans and the founder and leader of Cool Murphy, LLC.
Contact Her -
email: cool@coolmurphy.com
Facebook: @homeinneworleans
IG: @coolmurphynola
YouTube: @coolmurphynola
phone: 504-321-3194
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