- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
I'm no math whiz but the Boom is Real Estate est. at 7.4% rise in home prices since Jan. 1 and the interest rates which are at 6.22% is about a net wash from the 6.8% "enjoyed" about the turn of the year. If 30 yr. fixed rates at 6.8% on $100,000 is compared to $107,400 at 6.22% then the monthly payment upon purchasing the hyper inflated house is a net loss of $7 a month or so ($648.25 vs $655.79) and the break even payment of $648.25 is $106,165. Thus my spin is housing is increasing only what the people can afford for a payment. Good time to refinance, but you are not getting one whit better deal in a purchase.
The crunch will be when interest rates return to levels near 8%. 30 yr. loans or not, people refi or take second mortgages on average about every 3 years. I believe I read somewhere that the average tenure in a house is 5 years. If you think you are being pressured now, wait until interest rates rise and slows the home price rise with it. Needing to borrow more or get better terms with better LTV ratios, we will be the "deal killers" unlike anything most of us have ever experienced. I just can't wait for the games to begin.
ter
The crunch will be when interest rates return to levels near 8%. 30 yr. loans or not, people refi or take second mortgages on average about every 3 years. I believe I read somewhere that the average tenure in a house is 5 years. If you think you are being pressured now, wait until interest rates rise and slows the home price rise with it. Needing to borrow more or get better terms with better LTV ratios, we will be the "deal killers" unlike anything most of us have ever experienced. I just can't wait for the games to begin.
ter