Existing
home prices will continue to increase due to the pent up demand and the lack of
supply. The overriding factor stopping people from buying and families from
selling is fear.
Just
because the election is over, inflation, lack of work, the economy etc., etc.,
etc., still exists.
Example:
A
home priced at $150,000 at 3.25% = a monthly payment of $653
(Note:
an interest rate common several months ago)
(Note:
the above example is for a 3 BR / 2.5 Bath home with a 2-car garage)
(Note:
how much is your monthly rent for what size apartment?)
Add
a 10% price increase in 2013 but keep the interest rate low
$165,000
at 3.25% = a monthly payment of $718
There
is no reason for home buyers to get off the fence especially with the Fed
indicating that interest rates will stay low forever! Oh, not forever. Just
until the unemployment rate is lowered. When do you think that will happen and
what do you think will happen next?
The
Fed will increase the interest rates easing off their buying spree. Mortgage
interest rates are already around 4.25% or higher but still historically “low”.
Back to our Example:
A
home priced at $150,000 at 3.25% = a monthly payment of $653
Add
a 10% price increase in 2013; keep the interest rate “low” but at 4.25%
$165,000
at 4.25% = a monthly payment of $812
Add
a 10% price increase in 2013; keep the interest rate “low” but at 5.25%
$165,000
at 5.25% = a monthly payment of $911
By doing nothing but sitting there on the fence, watch the monthly cost increase before your eyes!!
Yes
home prices are on the rise. Interest rates will go up. Rents will continue to
increase. If you are a buyer, what are you waiting for?
Another
way to look at the buying equation:
If
you earn $54,000 with normal credit issues:
You
can afford to buy:
$145,000 home at 3.25%
or
$115,000 home at 5.25%.
If
you are a buyer, why are you waiting? If not now….WHEN?
If
you know someone that is interested in buying a home, please forward this post
to them.
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