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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (11732)	7/24/2003 11:33:48 AM
From: Jim McMannis	Read Replies (2) \| Respond to of 306849

Long rates just broke out to short term highs. 30 yr mortgage lock today is up over 6% at 6.06%. Should we expect a little mad rush here to get in before the door shuts? Perhaps. Then again some will remain in denial, holding off for lower rates. The only for sure thing is that when there is a large change in trend there is a lot of denial. They had some talking head real estate expert on yesterday saying that it would take upwards of 8% mortgage rates before big crimp on RE occured. Yada Yada Yada.

To: GraceZ who wrote (11732)	7/25/2003 10:08:48 AM
From: J. P.	Read Replies (2) \| Respond to of 306849

Now-a-days where I live, a nice starter is around 300-400K. So you're looking at about 70k cash to get in (down payment, closing costs, etc.). That's a lot of cash! And with interest rates going up, chances are house prices will flatten and probably fall. If they fall the 70k goes -poof- But 150k is pretty low. With 70K you can almost pay off half immediately. And if you can raise 70K, you can probably pay off the balance quicker than 30 or even 15 years (likely 5 years). So you see the big difference between now and 10 years ago? The principle on houses is sky high! And even the "low" interest rates eat you up at these principle asking prices. This market is punishing people who are starting out. Of course, one can consider moving to another area. But sometimes there are considerations that make that not possible.