When people are stretching themselves as tight as possible to make a $2600 or a $4500 a month payment, yes $50-$100 more is a lot.
I don’t think you’re following me. Our prices aren’t where they are at because we can pay $2600 for a townhome instead of a $2650. Or pay $4500 instead fo $4600 for La Costa.
It’s because we can pay $1250 for the townhome and $2500 for La Costa courtesy of the low teasers and Option ARMs.
A few will drop out as that $2600 goes to $2650 because they were really planning on $2400. And I agree, even minor rate increases wrecks new home developments. But for housing in general, 80% of the homes haven’t been using conventional loans.
The switch from non-conventional to conventional funding isn’t a $50/month hop, it’s a $1500 to $2500 a month increase. And that will drop 80% of the buyers out of the market.
