I would love to take credit for the thought provoking “If You Don’t Buy a House Now, You’re Stupid or Broke” but that claim to fame goes to Business Week writer Marc Roth.
Roth makes several unassailable points in his weekly column, including this:
“Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let’s assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide.
Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000 . . . .
(December 09 is on the far right. The blue line represents the prime rate, orange is the 30 yr. fixed rate mortgage.)
What I’m trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home.
If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.”
Read the entire article here and then, being neither stupid or broke, call me and let’s buy a house now.
Michael . . . at 703.927.4554