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Strategies & Market Trends : The Residential Real Estate Crash Index
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From: Tradelite8/10/2007 10:13:20 AM
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Just turned on the computer for the first time in about two days. Yesterday was a good day to be away from watching the market, altho I heard all about it on the car radio and later on TV. Glad I wasn't watching. Anyway.......

One fact about the relationship of interest rates to home prices comes to mind, which might have already been mentioned by someone else in the posts I haven't caught up with:

A couple years ago (or several years ago), I mentioned on the thread that speculating about and hoping for a real estate crash wouldn't benefit people who were waiting for lower home prices before buying anything, because rates would be higher anyway.

I calculated that a 2-percentage-point rise in interest rates would completely negate a 20-percent drop in prices--monthly payment would be the same.

I was accused of "talking my book". Any financial calculator speaks louder than any salesperson's book.

I guess buyers are figuring out that waiting for lower prices isn't going to save them any money. Jumbo loans are getting damned expensive by recent historical standards.

Got a CD maturing next week that's currently paying 5.20 APY. Will be very interested to see what the bank is offering if I leave the money there for another term.
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