Gross domestic product
Gross Domestic Product, or GDP, is a metric which takes into account the value of end-user goods and services in a given survey period, whether quarterly or annual. It can be calculated in three ways by focusing on production, incomes, or expenditures and it is used to provide insight to the size of a country’s economy and its rate of growth.
A Strong GDP, a larger economy, historically corelates to a strong real estate market denoted by increased property values and rental demand. This makes it a reliable and accessible first glance at market conditions and overall strength.
Inflation rates
Inflation has three primary means of reporting through the U.S. Bureau of Labor Statistics: the Consumer Price Index, Personal Consumption Expenditures, and the Producer Price Index. All of these come together to provide an account of the rate at which the cost of goods and services change over time.
When it comes to real estate investing, Inflation has a noted impact on how an investment Cash flows. Cash Flow is especially relevant in the case of held rental assets where the monthly and annual costs of a property come up against rental income to determine the return on investment.
Interest rates
Interest Rates change as a result of Federal Reserve (central banks) policy decisions. Keeping an eye on the Federal Fund Rate is the most direct place to look for interest rate information. The Fed Fund Rate is range set by the Federal Open Market Committee whose meetings are scheduled in advance, making it easier to anticipate when significant changes to rates may be imminent.
