Which is preferable: lower interest rates or lower prices?

[Anonymous]

“2) Can’t property value be reassessed and taxes reduced based on that? When or how often can this be done?”

That can’t be done in California because of Prop 13. Assesed value can only go up by a small fixed percentage a year.

[CA renter]

I agree with everyone above. Forget interest rates. Monthly payments, relative to income, are near historic highs. Higher interest rates do NOT mean higher monthly payments. The idiots who claim this consistently “forget” to note that prices will come down to balance the higher rates, especially when we are *entering* what is likely to be a severe recession. People cannot afford their current monthly payments, which is why we’re seeing all the foreclosures right now.

Buy when prices are low, rates are high, and monthly payments are near lows, relative to income.

Lower rates and loose lending go hand-in-hand. That’s when the buyer pool is large, and more people are willing to stretch their monthly budget to beat out other buyers.

Higher rates mean we’re probably seeing tighter lending standards (less money to lend / money is more valuable). The buyer pool will be smaller, with fewer people competing to buy, likely leading to lower monthly payments. These more qualified buyers will also be more thrifty and value their own money more, so they will not want to stretch their budgets.

The idea that you can always refi to a lower rate is true ONLY IF rates go down during the term of your loan. That may or may not happen. Doesn’t matter, because you have a lower price which can be paid off earlier; higher rate, so more can be written off on taxes; and when you buy low, it’s more likely you’ll see appreciation — in case you have to/want to sell before your mortgage is paid off.

ALWAYS buy low, sell high…always.

[CA renter]

I agree with everyone above. Forget interest rates. Monthly payments, relative to income, are near historic highs. Higher interest rates do NOT mean higher monthly payments. The idiots who claim this consistently “forget” to note that prices will come down to balance the higher rates, especially when we are *entering* what is likely to be a severe recession. People cannot afford their current monthly payments, which is why we’re seeing all the foreclosures right now.

Buy when prices are low, rates are high, and monthly payments are near lows, relative to income.

Lower rates and loose lending go hand-in-hand. That’s when the buyer pool is large, and more people are willing to stretch their monthly budget to beat out other buyers.

Higher rates mean we’re probably seeing tighter lending standards (less money to lend / money is more valuable). The buyer pool will be smaller, with fewer people competing to buy, likely leading to lower monthly payments. These more qualified buyers will also be more thrifty and value their own money more, so they will not want to stretch their budgets.

The idea that you can always refi to a lower rate is true ONLY IF rates go down during the term of your loan. That may or may not happen. Doesn’t matter, because you have a lower price which can be paid off earlier; higher rate, so more can be written off on taxes; and when you buy low, it’s more likely you’ll see appreciation — in case you have to/want to sell before your mortgage is paid off.

ALWAYS buy low, sell high…always.

[CA renter]

I agree with everyone above. Forget interest rates. Monthly payments, relative to income, are near historic highs. Higher interest rates do NOT mean higher monthly payments. The idiots who claim this consistently “forget” to note that prices will come down to balance the higher rates, especially when we are *entering* what is likely to be a severe recession. People cannot afford their current monthly payments, which is why we’re seeing all the foreclosures right now.

Buy when prices are low, rates are high, and monthly payments are near lows, relative to income.

Lower rates and loose lending go hand-in-hand. That’s when the buyer pool is large, and more people are willing to stretch their monthly budget to beat out other buyers.

Higher rates mean we’re probably seeing tighter lending standards (less money to lend / money is more valuable). The buyer pool will be smaller, with fewer people competing to buy, likely leading to lower monthly payments. These more qualified buyers will also be more thrifty and value their own money more, so they will not want to stretch their budgets.

The idea that you can always refi to a lower rate is true ONLY IF rates go down during the term of your loan. That may or may not happen. Doesn’t matter, because you have a lower price which can be paid off earlier; higher rate, so more can be written off on taxes; and when you buy low, it’s more likely you’ll see appreciation — in case you have to/want to sell before your mortgage is paid off.

ALWAYS buy low, sell high…always.

[CA renter]

I agree with everyone above. Forget interest rates. Monthly payments, relative to income, are near historic highs. Higher interest rates do NOT mean higher monthly payments. The idiots who claim this consistently “forget” to note that prices will come down to balance the higher rates, especially when we are *entering* what is likely to be a severe recession. People cannot afford their current monthly payments, which is why we’re seeing all the foreclosures right now.

Buy when prices are low, rates are high, and monthly payments are near lows, relative to income.

Lower rates and loose lending go hand-in-hand. That’s when the buyer pool is large, and more people are willing to stretch their monthly budget to beat out other buyers.

Higher rates mean we’re probably seeing tighter lending standards (less money to lend / money is more valuable). The buyer pool will be smaller, with fewer people competing to buy, likely leading to lower monthly payments. These more qualified buyers will also be more thrifty and value their own money more, so they will not want to stretch their budgets.

The idea that you can always refi to a lower rate is true ONLY IF rates go down during the term of your loan. That may or may not happen. Doesn’t matter, because you have a lower price which can be paid off earlier; higher rate, so more can be written off on taxes; and when you buy low, it’s more likely you’ll see appreciation — in case you have to/want to sell before your mortgage is paid off.

ALWAYS buy low, sell high…always.

[CA renter]

I agree with everyone above. Forget interest rates. Monthly payments, relative to income, are near historic highs. Higher interest rates do NOT mean higher monthly payments. The idiots who claim this consistently “forget” to note that prices will come down to balance the higher rates, especially when we are *entering* what is likely to be a severe recession. People cannot afford their current monthly payments, which is why we’re seeing all the foreclosures right now.

Buy when prices are low, rates are high, and monthly payments are near lows, relative to income.

Lower rates and loose lending go hand-in-hand. That’s when the buyer pool is large, and more people are willing to stretch their monthly budget to beat out other buyers.

Higher rates mean we’re probably seeing tighter lending standards (less money to lend / money is more valuable). The buyer pool will be smaller, with fewer people competing to buy, likely leading to lower monthly payments. These more qualified buyers will also be more thrifty and value their own money more, so they will not want to stretch their budgets.

The idea that you can always refi to a lower rate is true ONLY IF rates go down during the term of your loan. That may or may not happen. Doesn’t matter, because you have a lower price which can be paid off earlier; higher rate, so more can be written off on taxes; and when you buy low, it’s more likely you’ll see appreciation — in case you have to/want to sell before your mortgage is paid off.

ALWAYS buy low, sell high…always.

[GoUSC]

IF you HAVE to pick between the two you always want higher interest rates than housing prices. Because:

1. With a higher interest rate you at least have a bigger tax write-off.

2. Higher purchase price means higher property taxes and a quicker rate of increases.

AND MOST IMPORTANT

3. You can refinance into a lower interest rate when rates come down. What you pay for your house is what you pay for it. You can’t refinance your way out of that.

[GoUSC]

IF you HAVE to pick between the two you always want higher interest rates than housing prices. Because:

1. With a higher interest rate you at least have a bigger tax write-off.

2. Higher purchase price means higher property taxes and a quicker rate of increases.

AND MOST IMPORTANT

3. You can refinance into a lower interest rate when rates come down. What you pay for your house is what you pay for it. You can’t refinance your way out of that.

[GoUSC]

IF you HAVE to pick between the two you always want higher interest rates than housing prices. Because:

1. With a higher interest rate you at least have a bigger tax write-off.

2. Higher purchase price means higher property taxes and a quicker rate of increases.

AND MOST IMPORTANT

3. You can refinance into a lower interest rate when rates come down. What you pay for your house is what you pay for it. You can’t refinance your way out of that.

[GoUSC]

IF you HAVE to pick between the two you always want higher interest rates than housing prices. Because:

1. With a higher interest rate you at least have a bigger tax write-off.

2. Higher purchase price means higher property taxes and a quicker rate of increases.

AND MOST IMPORTANT

3. You can refinance into a lower interest rate when rates come down. What you pay for your house is what you pay for it. You can’t refinance your way out of that.

[GoUSC]

IF you HAVE to pick between the two you always want higher interest rates than housing prices. Because:

1. With a higher interest rate you at least have a bigger tax write-off.

2. Higher purchase price means higher property taxes and a quicker rate of increases.

AND MOST IMPORTANT

3. You can refinance into a lower interest rate when rates come down. What you pay for your house is what you pay for it. You can’t refinance your way out of that.

[NotCranky]

“1) It could be many, many years before the interest rate is back to the 6’s and he can refinance. Meanwhile you’re paying that high interest (interest deduction helps, but not that much).”

It is a crap shoot in some cases. Rates for the most part are national and real estate is local. Every sub-market is not going to respond to interest rate hikes the same way. The effect of rate hikes can be mitigated by the timing of their occurrence in the business cycle and many other variables.

I wouldn’t buy based on low rates, you have to consider market activity,trends ect. I also wouldn’t refuse to buy because rates have not gone up yet. You have to look at the total package where you want to buy and the price at which you can get in to come up with a upside/downside comparison with which to decide to take the plunge or not.

[NotCranky]

“1) It could be many, many years before the interest rate is back to the 6’s and he can refinance. Meanwhile you’re paying that high interest (interest deduction helps, but not that much).”

It is a crap shoot in some cases. Rates for the most part are national and real estate is local. Every sub-market is not going to respond to interest rate hikes the same way. The effect of rate hikes can be mitigated by the timing of their occurrence in the business cycle and many other variables.

I wouldn’t buy based on low rates, you have to consider market activity,trends ect. I also wouldn’t refuse to buy because rates have not gone up yet. You have to look at the total package where you want to buy and the price at which you can get in to come up with a upside/downside comparison with which to decide to take the plunge or not.

[NotCranky]

“1) It could be many, many years before the interest rate is back to the 6’s and he can refinance. Meanwhile you’re paying that high interest (interest deduction helps, but not that much).”

It is a crap shoot in some cases. Rates for the most part are national and real estate is local. Every sub-market is not going to respond to interest rate hikes the same way. The effect of rate hikes can be mitigated by the timing of their occurrence in the business cycle and many other variables.

I wouldn’t buy based on low rates, you have to consider market activity,trends ect. I also wouldn’t refuse to buy because rates have not gone up yet. You have to look at the total package where you want to buy and the price at which you can get in to come up with a upside/downside comparison with which to decide to take the plunge or not.

[NotCranky]

“1) It could be many, many years before the interest rate is back to the 6’s and he can refinance. Meanwhile you’re paying that high interest (interest deduction helps, but not that much).”

It is a crap shoot in some cases. Rates for the most part are national and real estate is local. Every sub-market is not going to respond to interest rate hikes the same way. The effect of rate hikes can be mitigated by the timing of their occurrence in the business cycle and many other variables.

I wouldn’t buy based on low rates, you have to consider market activity,trends ect. I also wouldn’t refuse to buy because rates have not gone up yet. You have to look at the total package where you want to buy and the price at which you can get in to come up with a upside/downside comparison with which to decide to take the plunge or not.

[Author]

Posts