Friday Mortgage Wrap Up
Yes, the Case-Schiller Index came out showing a net drop in the average price of homes in the top 20 cities. Even though pricing is a LOCAL issue (remember don't paint Denver with a Detroit housing number), let's assume that your buyer's listen to this stuff and think the value of the house they buy today will be worth 2.5% less next year....so they want to wait. 
Good news! The employment numbers for March came out strong today. The unemployment rate dropped too. All of this underscores the fact that the economy is doing better. Combine this with the Core PCE index, the Fed's measure of inflation, coming in at an annualized rate of 2.4% and you have definite upward pressure on rates.
Here is what you tell them: "Yes I KNOW you're concerned, but rates ARE going up because the economy is doing better - just look at the job numbers. Even IF your home value drops 2.5% next year, do you know how much LESS home you could buy for the same monthly payment if you wait and rates jump up 1%. - because that's what they did in December? 10%! So, on a $200,000 home, you might save $5,000 by waiting a year, but you'd LOOSE $20,000 in buyer power due to higher rates...not to mention the tax benefits! Alan Greenspan said it best "I didn't make money when buying high and selling low."
Have a Productive Weekend!
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