Dec 5, 2009

Great Price vs Great Mortgage Rate

This has been a very busy week for showings in North Dallas. From Highland Park to Plano, lots of people are shopping and making offers - which is rather unusual for this time of year. I speculate that one of the reasons is that both prices and interest rates are great. And mortgage rates are starting to inch up.

One of the reasons you should pay attention to mortgage rates is because, basically:

A 1% difference in your mortgage interest rates equals a 10% difference in price - roughly. The New York Times confirmed in an article on July 27th that "If home prices come down another 10%, but interest rates increase by 1 percentage point, that would mean the same monthly payment today versus waiting".

The chart below helps show what I mean.

So with interest rates on the rise and prices so low, it seems that people have decided not to wait any longer for a great deal on a home.

No comments: