Headline News

By
Real Estate Agent with Remax Advantage Plus
Today almost every headline you see about real estate is doom and gloom.  It almost seems there is no end in sight to the housing downturn.  The fact is 2007 was the first year since the great depression that we have experienced a negative drop in housing prices on a national basis.  That is astounding!  What is being done to turn this around?  Mortgage interest rates are currently within ear shot of the very low's of 2003.  The Federal Reserve has lowered the Fed Funds Rate at a pace we have not seen in decades.  Additonally, Congress has passed a $170 billion stimulus package that will hit later this year.  All of this fuel for the fire that stokes growth in our economy.  Now that we have reviewed the data points, should you wait a year two see "if" housing prices recover?  The recent article I read was in part authored by Peter Lynch.  Peter points out that a typical home selling today for $218,900 with 20% down at 5.50% would carry a monthly payment of $994.31.  Lets say that 12 months from now the same house goes for 10% less, or $197,010.  But by then the recession is over and the Fed is increasing rates to stem inflation.  If mortgage costs rise one percent, to 6.50%, your monthly payment would $996.19 and you saved nothing.  Wow!  The math really works.  The delay would have saved nothing and cost you a year living someplace you would rather not be. 

Comments (1)

Brian Rademacher
Remax Advantage Plus - Savage, MN
Hello
Apr 22, 2008 06:22 AM