As a
seller, you will be most concerned about ‘short term price’ – where home values
are headed over the next six months. As a buyer, you must be concerned not
about price but instead about the ‘long term cost’ of the home.
The Mortgage
Bankers Association (MBA), the National Association of Realtors, Fannie
Mae and Freddie Mac all projected that mortgage interest rates will
increase by about three-quarters of a percentage point over the next twelve
months.
According
to CoreLogic’s most recent Home Price Index Report, home prices
will appreciate by 5.2% over the next 12 months.
What
Does This Mean as a Buyer?
Here is a
simple demonstration of what impact an interest rate increase would have on the
mortgage payment of a home selling for approximately $250,000 today if home
prices appreciate by the 5.2% predicted by CoreLogic over the next
twelve month
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