Ryan and I are getting a large volume of people who are considering putting their home on the market. With rates hovering around 4.75%, many buyers are deciding to go ahead and purchase a home. We hear a lot of people who are wanting to wait to “hit the bottom” of the market. Something interesting is this:
For this example I am going to use a base price of $200,000 as the purchase price.
|
Date |
Loan |
Interest Rate |
Payment |
Difference |
Yearly Difference |
|
Nov. 2010 |
$200,000 |
4.17% |
974.54 |
||
|
Today |
$200,000 |
4.87% |
1057.81 |
$83.27 |
$999 |
Over the 30 year life of this loan, the difference in the costs would amount to $29,977. If you look at purchasing this way, home prices have to decrease 10% to account for every 1% increase in interest rates!
Home prices have decrease 10% without question in Auburn/Opelika. Will they decrease another 10% before the rates increase another percentage point? That is a big question. Is that worth a $30,000 risk?
Forbes, The Wall Street Journal, real estate forecaster John Paulson—even Donald Trump are all saying BUY NOW. Since they make their living forecasting real estate and financial trends, seems like a good idea to listen.