think that the good times in mortgages would go on forever..
-----------
Posted By JGBell, Mesa, Az: December 10, 2010 7:53 pm
Nin-Hai, you are missing some things important.
First, just as the decrease in the interest rates made homes more affordable, bcuz the payments required each month dropped, a lot. Increasing mortgage rates will drive huge numbers of currently eligible buyers OUT of the market. The pool of buyers shrinks, a lot. Especially first time & entry level buyers.
Second, while the collateral damage will be that home prices drop, that will NOT impact buyers as much as their monthly interest payments going up. Look at both of those numbers, you will see interest trumps price every time.
Third, the increase will NOT change the "eligibility" requirements, which are extremely narrow now. Nor will it create condo and/or jumbo financing that does not exist, currently.
Those new buyers, that you think will panic an buy before the interest rates go even farther up, will be like underwater debtors applying for "Modifications" - you can't get there from here.
-----------
---
-----------
---------
------------
-----------
===========
Will rising mortgage rates spur home sales?
Historically low mortgage rates didn't encourage new home sales, but rising rates could finally push home-buying fence-sitters into the market.
http://finance.fortune.cnn.com/2010/12/10/will-rising-mortgage-rates-spur-home-sales/
===========
No comments:
Post a Comment