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Real Estate Insight

Mortgage Rates Rose Past 7%

Mortgage rates rose past 7%, reaching the highest level since November 2023.

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Performance Property Real Estate Question

How Low Will Interest Rates Go In 2024

Q: I want to refinance my home mortgage. Mortgage rates have finally been falling. How low do you think interest rates will go this year? Corey, Parsippany, NJ A: The 2 main drivers of mortgage interest rates are 1) current economic conditions like current inflation and the federal funds rate and 2) a borrower’s personal financial profile. A borrower’s personal financial position has a huge impact on the mortgage interest rate they’ll pay on a mortgage which is why everyone that refinances an existing mortgage or buys a home with mortgage financing at the same time will not get the same interest rate. The Fed raised the federal funds rate 11 times between March 2022 and July 2023 to combat […]

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Real Estate Insight

Adjustable-Rate Mortgage Demand Hit It’s Highest Level In A Year

Adjustable-Rate mortgage demand hit it’s highest level in a year as interest rates continue to climb.

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Performance Property Real Estate Question

Will Dip In Apt Construction Lower Rents Prices

Q: My cousin is a builder and he said he can’t get financing for his latest multi-family projects. Do you think this will have any impact on rent prices? Connie, Yonkers, NY A: Construction financing has been drying up this year due to several factors including the increasing cost of insurance, building materials and the flattening of rent prices. Consequently, it is increasingly difficult for builders to take on new multi-family apartment projects which has resulted in lower multi-family housing starts this year. The most important factor that influences rent prices is supply and demand so theoretically, a reduction in multi-family construction projects could eventually reduce the overall supply of available rental units and thereby increase rent prices. However, the […]

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Performance Property Real Estate Question

The Real Driver Of Home Sales-NOT Interest Rates

Q: With mortgage rates so much higher now, are people going to stop buying houses? Jake, Springfield, NJ A: Contrary to what you’ll often hear in the media, people generally buy and sell homes based on life events not based on macroeconomic factors like interest rates. Despite recent increases in mortgage interest rates, the homeownership rate in the US has risen to almost 66%, which exceeds the level of homeownership before the pandemic and the rate of homeownership among younger households, who are typically more likely to rent than own their primary residence has also increased over the past five years both for households under 35 years old and for households between 35 and 44 years old. The media tends […]

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Performance Property Real Estate Question

7 Things You Can & Can’t Control In Real Estate (500th GL Real Estate Podcast Episode)

  Happy 500th Episode! Special thanks to everyone in my Real Estate Insider family for tuning in and checking out my weekly podcast and video blog over the last 9 years! It has been a long, challenging but rewarding journey. It was an accident that I got involved in real estate in the first place (you can check out my bio if you’re interested in that back story). Today for my 500th podcast episode, we’re going to go through 7 things you can and cannot control in real estate. We’ll start by talking about 7 things you cannot control in real estate, which unfortunately but predictably are the real estate topics that you hear about most in the news. The […]

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Performance Property Real Estate Question

Tip To Sell More Homes When Mortgage Rates Are High

Q: Gerald, I’m a realtor. I’m losing deals now, some already under contract because buyers are pulling out because of higher mortgage rates. Is there anything I can do? Madelyn, Mountainside, NJ A: Mortgage interest rates have almost tripled in recent history. Higher mortgage rates reduce the price a home buyer can afford to pay for a home. In addition, higher mortgage rates have reduced the number of homes for sale because many trade up buyers who want to sell their home and buy a bigger home are staying put because they don’t want to trade the lower mortgage interest rate they have on their current home for a more expensive home with a much higher mortgage interest rate. One […]

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Performance Property Real Estate Question

When Will Interest Rates Go Back Down

Q: Interest rates keep going up.  When do you think rates will go back down? Bill, Kenilworth, NJ A: Many Fed watchers expect the Fed to lower interest rates in mid 2023 under the assumption that inflation falls back to the Fed’s 2% target. The direction interest rates will move depends on 2 things: 1) how persistent inflation is over the next 6-9 months and 2) if we are in a full blown recession by mid 2023. If inflation is lower, rates are likely to go down and if we are in a full blown recession in mid 2023, the Fed will likely lower rates. Thanks for your question, Bill.  For more real estate tips and information visit my blog […]

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Performance Property Real Estate Question

The Upside Of Higher Mortgage Interest Rate

Q: Mortgage rates have been going up recently. Do you think that makes now a bad time to buy real estate? Eric, Livingston, NJ A: When you borrow money to buy a home, higher interest rates reduce the amount of home you can buy. For every 1% increase in mortgage interest rates, your purchasing power as a homeowner declines by 9%. However, higher mortgage rates may present a silver lining in today’s US housing markets. Home prices in most of the US in the last few years have increased at unsustainable levels and low mortgage interest rates have probably exacerbated those home price increases. Higher mortgage rates will make it more difficult for many home buyers to purchase a home, […]

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Performance Property Real Estate Question

How Fed’s Rate Cut Will Affect Housing

Q: How will the fed’s new rate cut affect housing? Haley, Montauk, NY A: The Federal Reserve announced that it would cut interest rates for the first time since the last recession. Economists are split on the immediate impact it will have on the housing market—what else is new?! Borrowers with adjustable-rate mortgages and commercial real estate loans will benefit from the rate cut. The important issue is how and if the fed’s rate cut will affect mortgage rates. The chief economist at realtor.com doesn’t believe the Fed’s rate cut will lead to a drop in longer-term mortgage rates because the rate cut announcement was anticipated. However, a rise in mortgage rates could further weaken already slowing housing markets, as […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/23/19

When interest rates are low always borrow for the longest term you can negotiate.

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Performance Property Real Estate Question

Financial Trick Shows How To Double Your Money

Q: We’re planning for college for our little ones comparing investments including real estate. I’m looking for something that will double in value over the next decade–any suggestions? Doug, Manasquan, NJ A: The Rule Of 72 Shortcut to estimate the number of years required to double your money at an annual rate of return. Divide an interest rate into 72 to get the number of years required to double your money or divide the number of years to double your money into 72 to get the annual interest rate required to double your money. Examples: 9*8, 6*12, 24*3, 36*2 (8 years@9%, 9 years@8%, 6 years@12%, 12 years@6%, 3 years@24%, 24 years@3%, 2 years@36%, 36 years@2%) Thanks for your question, Doug. […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/28/17

When interest rates are low always borrow (at a fixed rate) for the longest term you can negotiate.

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Performance Property Real Estate Question

Will The Fed Raise Interest Rates?

Q: Gerald, I just got started investing in real estate. People say the Fed is going to raise interest rates. Is that going to happen and if it does should I be worried? Kendrick, Cuyahoga Falls, Ohio A: Hi Kendrick, I’m always reluctant to make predictions because unlike a lot of pundits you see on TV, I can’t predict the future however all signs point to another interest rate increase and Janet Yellen has intimated that a rate increase is likely to happen. The bigger and more important issue for you as a new investor is to understand where you have the most leverage and to then focus on those areas. Interest rates are one of 7 things you cannot […]

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How Smart Investors Take Advantage of Low Interest Rates

Q: Gerald, how can I make the most of today’s low interest rates?  Nirav, Somerville, MA A: That’s a great question, Nirav.  One obvious way to take advantage of historically low rates is by purchasing real estate with a fixed rate mortgage.  Nobody knows how interest rates will change in the future, but locking in a long-term mortgage at a low fixed rate is normally a smart move if you can afford the payments particularly if mortgage rates go up in the future. A less obvious effect of a low interest rate environment that truly savvy real estate investors recognize is that low interest rates often result in there being a lot of unemployed capital sitting on the sidelines looking […]

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What Interest Rate Should You Pay for a Hard Money Rehab Loan?

Q: What interest rate should you pay for a hard money rehab loan? Victor, Dix Hills, NY A: That’s a great question, Victor and it’s one I hear all the time. The interest rates on hard money rehab loans vary a little from lender to lender, but generally speaking, the interest rate charged falls within the same range (12-15%). However, there’s a lot more to consider than just the interest rate you pay when you borrow money to renovate a property. The more important question is regarding the terms of the hard money loan itself, specifically, whether you have to make monthly or quarterly payments on the loan before you sell the property, whether the loan requires a personal guarantee […]

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