Even though the current market has caused Interest rates to decrease in the last week, the rate is still higher than it was the beginning of 2008!
January 24, 2008: 5.48%
October 13, 2008: 5.94%
Let's look at the effect of interest rate hikes and home price declines and how they might affect your finances.
20% down SP 218,900 Interest Rate 5.94% Payment $1043
Prices drop by 5% interest rates increase by .05%
20% down SP $207,955 Interest rate 6.44% Payment $1,045
Prices decrease by 10% interest rates rise 1%
20% down SP $197,010 Interest Rate 6.94% Payment $1,042.
I have used this wen talking about buyers to educate them on looking at the total package not just price