Matt Huband

If you have been following the financial news lately you may have started to hear talk about when the FED is going to raise interest rates. It should be no surprise that sooner or later the FED will have to raise rates since they have been at all time lows for many years. The FED is going to have to be extra careful when the time comes to raise rates. When do they do it?? How much?? When do they stop?? In the next 3 to 6 months I think we will find out the answer to all of those questions. In the meantime it's time to start thinking about how is it going to impact you,me, everyone.

First and foremost raising rates will hurt anyone currently making payments on revolving lines of credit like credit cards, home equity lines, and any loan based on the prime rate. Those minimum payments are going to go up each time the FED raises rates. Many people are struggling to make ends meet and rely heavily on credit to get by and now is the time to make those extra payments to pay down some of that debt if possible. Another thing to consider might be moving all of the remaining revolving debt to a fixed loan and take advantage of low fixed loan rates. The payments may be more in the short term because you are paying down principal and interest but in the long run may save you if rates increase dramatically. Do your homework to see what options are right for you. On a more positive note for everyone who has been getting those ridiculously low interest rates on checking, money market, cd's and money market accounts will be happy as those rates will rise paying out more interest.

Now let's talk about what affect all of this will have on mortgage rates. Finally the real estate market is starting on the road to recovery, at least here on the Outer Banks it has, and low mortgage rates have had a big impact on that. When the FED does decide to raise rates mortgages will follow suit as well. As mortgage rates rise it decreases a buyer's purchasing power substantially.

Example: If a buyer is qualified for a maximum monthly principal & interest payment of $1500 month with 20% down a buyer can purchase a house for $418,750. However when mortgage rates go up 1% the buyer can only purchase a house for $375,000 to still have a P&I payment of $1500 a month.

Purchase price $418,750-$83,750(20% down)=$335,000 Loan amount
Loan amount $335,000 X 5% 30yr Fixed Mortgage=$1500 P&I payment

Purchase price $375,000-$75,000(20% down)=$300,000 Loan amount
Loan amount $300,000 x 6% 30yr Fixed Mortgage=$1500 P&I payment

Just a 1% increase in mortgage rates decreases a buyer's purchasing power by $43,750!! If you are currently looking to buy or on the sidelines waiting you need to consider what kind of impact rising mortgage rates will have on your ability to buy. Get with your local lender and Realtor to find out what prices are doing in your area(remember real estate is local not national) and ask them to help you figure out how much rising mortgage rates will hurt you. You may realize that now is the time to jump off the fence and get the house you have always wanted.

For more information about the Outer Banks real estate market go to www.HometownOBX.com or email MattHuband@HometownOBX.com

Matt Huband is Broker/Owner of Hometown Realty in Kitty Hawk, NC working with buyers and seller from Corolla to Hatteras.

OK, it's time to breath again after a busy summer season on the Outer Banks.
Now comes what I consider the absolute best time to visit the Outer Banks, Fall!!

As for the Outer Banks real estate market many of you have been waiting and waiting for what you would consider the "right time" to buy. Here on the Outer Banks for the 4th month in a row home sales have reached 100+. This has not occurred in over a year and so far this month we are on pace to make it 5 in a row. Also the percentage of distressed properties sold peaked in Feb. 09 for Short Sales and March ‘09 for Foreclosures Mortgage rates are still hovering around 5% and lenders are anxious to lend money, underwriting standards are easing and old mortgage programs are available again. With prices back to 2003-2004 levels and sellers still willing to negotiate on price ( 6% on avg.), to say it's a buyer's market is an understatement.

The most glaring statistic that shows the Outer Banks is bottoming out is the average sold price decreased just 1.6% at the end of August compared to July. I anticipate this price stabilization will continue and by next year start to go in the other direction. Due to the unique nature of our market, statistically the Outer Banks has always been ahead of the national real estate market in terms of a decline and recovery. The Outer Banks started to decline almost 2 years ahead of the national market. If the same holds true our recovery is already 8 months underway which means the national market is about a year away from stabilizing. Remember, real estate is local and therefore what you hear on the TV or read about does not accurately reflect what is happening in every location. Every market is different and is recovering at a different pace.

The Outer Banks market is well on the road to recovery!!

For more information about the Outer Banks real estate market contact MattHuband@HometownOBX.com or go to www.HometownOBX.com

Opening on Thursday, October 8, with 29 homes spanning Corolla on the Currituck Banks to the laid back atmosphere of the towns on Hatteras Island, the Outer Banks Home Builders Association's 17th Annual Parade of Homes promises a fresh perspective on newly constructed coastal homes. This year's sampling of homes has incorporated new designs, technologies, green building methods and new product innovations and furnishings. It is your best opportunity to walk through and study all 29 of our showcase homes covering 121 miles of our beautiful coastline while enjoying the relative calm of the off season and the stellar weather fall brings to our shores.

The participating builders and associate members of the Outer Banks Home Builders Association hope you will join us for this annual Parade. And our tour is your tour - to be taken on your own timetable Thursday, October 8 through Sunday, October 11. All Parade homes are open from 10 a.m. to 6 p.m. all four days of the tour. These homes are each a unique interpretation of life at the beach - be it design of the home, themed décor, location or purpose- with tremendous diversity among the offerings.

To learn more about the Parade Of Homes go to the Outer Banks Homebuilders website.

The Outer Banks real estate market has seen a dramatic increase in buyer activity and sales since the beginning of the year. The Outer Banks market has leveled off and prices are stabilizing!! For more information about Outer Banks real estate and to sign up for a FREE Foreclosure & Short Sale list go to www.HometownOBX.com or contact MattHuband@HometownOBX.com

Outer Banks named "Drive of a lifetime" by National Geographic Magazine

This 114-mile drive cruises from Corolla to Ocracoke
Village. Start at the northern end of Highway 12, literally where the pavement turns to sand at the Currituck Banks Estuarine Reserve. Follow it to Route 158, which is the bypass road for Highway 12 and travels through Kitty Hawk, Kill Devil Hills and Nags Head. Rejoin Highway 12 at Whalebone Junction (the entrance to Cape Hatteras National Seashore), and stay on it all the way to Ocracoke Village, including the car ferry from Hatteras Village to Ocracoke Island. The route, mostly two-lane, runs straight and flat, linking communities of weathered beach houses, offering ocean views amid the dunes, and serving up extended vistas of the sound.

Go to National Geographic Drive of a Lifetime for more information & the driving route

To learn more about the Outer Banks real estate market go to www.HometownOBX.com