Predicting the turn of the market…

At last year’s prevailing rate of 6.0% that $1000 monthly payment amount would mean that the lender would pre-approve you for a home purchase of $132,000 (Our pricing assumptions here are based on Trussville Tax District Millage Rates and market rates for full homeowners coverage / hazard insurance). At today’s prevailing rates of say 4.5% the same $1000 monthly payment would allow you to qualify for a home loan of $152,500. Do you think the extra $20,000 would buy you more of what you’re looking for?

At this time the Federal Reserve has stated that it does not plan to modify its monetary policy impacting interest rates prior to end of the first quarter of 2011. So, it is anticipated that interest rates will remain at the current historic lows through that point.

While market prediction is largely a fool’s game, these low interest rates along with the low prices in the market coupled with the trend toward market stabilization as suggested by the latest S&P Case Shiller indices seems to indicate the perfect storm for the prospective home buyer. How long that window will remain open remains to be seen, but it does appear that the winds are at least beginning to change directions.

May the Market be with you.

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