Menu
There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bare. Trulia just reported that asking prices have jumped dramatically and the increase is accelerating:
Buyers’ Purchasing PowerLet’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022). The Impact on PricesThis decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow. If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months. - source KCM Blog, July 15, 2013
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
AuthorPamela Edwards is an award winning, passionate Realtor and a native Dallasite. Her innovative marketing strategies lead to homes being sold 58% faster than the market average. Pamela goes above and beyond always focusing on having her clients best interest at hand. Archives
January 2015
|