<<Well, I would say to anyone who is thinking about buying a house right now, "Take your time.">>
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Oddly enough, that's the advice that has been doled out to certain people over the years, over and over again.
Residential real estate has never been regarded as a *bargain* that's cheap to obtain, under any market conditions.
If you mean people should take their time to wait for prices to fall, here's what happens to a 30-year mortgage payment when prices fall 20 percent, but interest rates rise by 2 percentage points:
Loan $250,000... Interest rate 6%... Monthly PI $1,498.88
Loan $200,000... Interest rate 8%... Monthly PI $1,467.53
Loan $500,000... Interest rate 6%... Monthly PI $2,997.75
Loan $400,000... Interest rate 8%... Monthly PI $2,935.06
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If you happen to know that both rates and prices will fall at the same time, your advice would be correct. But I learned a long time ago not to predict where either prices or rates are going to go. Right now, prices are sticky in some areas of the country, and rates are going up as the "repricing of risk" occurs.
Buyers primarily need to care about what the home will cost each month, so they can meet the payments and stay in it. |
