Recent New Home Sales Surge Nationally Despite Slowly Rising Mortgage Interest Rates and Possible Fed Tapering

Posted by Gatlin on

real estate investment

As we head towards the end of 2013, and into the start of 2014, there are some noteworthy national trends in real estate that are worth watching. These primarily center on the increasing likelihood of rising mortgage interest rates, as well as the possibility of the Federal Reserve beginning to taper, or slow down, its long-running bond buyback program. Both trends could foretell significant changes in the real estate market nationally in 2014.

In spite of these emerging trends, there are some other numbers worth noting in terms of the national real estate market that could also impact the coming year. One of these is that new home sales surged in October 2013 by 25% from the previous month, according to a report released by the U.S. Department of Commerce.

According to Keith Gumbinger, Vice-President of the mortgage information site HSH Associates, “It may very well be that a lot of folks are feeling better about their prospects and buying a new home.” In addition, Gumbinger also stated that there has been a general ease of financing for buyers, as “builders are motivated to get folks into homes.” Finally, Gumbinger also said that inventories of existing homes are thin in several markets, prompting people to build new homes rather than buy old ones.

The largest trend, however, in the coming year will center on the very real possibility of rising mortgage interest rates, especially since the Fed is currently weighing whether or not to start with tapering, or reducing the amount and scale to the Fed has been buying back bonds and securities since the 2008 financial crisis. The key to any real impacts will center on job and wage growth in the economy as a whole, and rising home prices will also have an impact as to whether or not there will be more buyers and sellers on the market in the coming year. At this point, it is too early to state how much of an impact this will have on the market, even though mortgage rates, from a more historical perspective, still remain low by comparison.

In view of these emerging trends, as well as recent surges in both home prices and new home sales nationally, there has never been a better time to find the home of your dreams, right here in the Great Smoky Mountains! Please feel free to browse our available inventory of properties, and see the many varieties of properties that we currently have here in the Smokies! Let us help you realize your home ownership dreams today!

 

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The Jason White Team
Century 21 Four Seasons Realty
1441 Wiley Oakley Dr
Gatlinburg, TN 37738
Toll Free: 877-678-2121
Fax: 865-436-7227
Email: jason@jasonwhiteteam.com
Website: www.SmokyMountainLifestyle.com

Federal Reserve’s Decision Wednesday to Continue Stimulus Could Keep Short-Term Interest Rates Low for Immediate Future

Posted by Gatlin on

Real Estate Investing

On Wednesday, the Federal Reserve made the announcement that it would continue its long-running stimulus program of asset purchases and low interest rates. The Fed was widely expected to continue adding $85 billion a month to its portfolio of Treasury securities and mortgage-backed securities, particularly after the disruptive partial shutdown of the federal government in the first half of October.

The Fed maintained a relatively optimistic economic outlook in the statement, released after a scheduled two-day meeting of its policy-making committee. It said the economy continued to expand “at a moderate pace” and that the availability of jobs continued to improve.

“Taking into account the extent of federal fiscal retrenchment over the past year, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy,” the Federal Open Market Committee said in its statement. “However, the committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”

As a result of the Fed’s decision, the expectations are that short-term interest rates will remain low, at least for the immediate future. Fears about higher interest rates, especially on mortgages, have been on the rise since the Fed had also recently indicated a slowdown, or tapering, of its ongoing stimulus program. Fed officials had spent much of the summer preparing investors for a retreat from the bank’s stimulus campaign before the end of the year. That remains a possibility: The Fed’s policy-making committee is scheduled to meet for the final time this year in mid-December. However, no timetable or other decision on any tapering is expected from the Fed until at least mid-December, at the earliest.

What does this all mean for you? With low short-term interest rates still anticipated for at least the immediate future, there are many great deals and properties available here in the Great Smoky Mountains, with many types of homes and great deals still available! Please feel free to browse our available properties today, and let us help you find the home of your dreams!

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The Jason White Team
Century 21 Four Seasons Realty
1441 Wiley Oakley Dr
Gatlinburg, TN 37738
Toll Free: 877-678-2121
Fax: 865-436-7227
Email: jason@jasonwhiteteam.com
Website: www.SmokyMountainLifestyle.com