Lower Home Prices Don't Always Equate to Lower Mortgage Payments

Our first inclination is to assume that lower home prices will equal to smaller home payments.  Here is one point to consider.  Even if you believe that home prices will continue to decline, it's very difficult to believe that interest rates will remain at these low levels.

Did you know that even if home prices were to decline 10% but interest rates available for home loans were to increase by 1.00% during that time, your monthly principal and interest payment would actually be higher?  It's true.  So, if you are thinking of buying, get busy and get in the game now.  To quote Warren Buffet, "If you wait for the robins, spring will be over."

There will be plenty of debate when Federal Reserve Officials meet in mid September to determine whether to hike interest rates for the first time since the end of the Great Recession.  After months of forewarning by Federal Reserve officials that they are preparing to raise short term interest rates, some international officials say to "get on with it".  Many things to consider with low inflation, market turmoil, job growth and the impact of China's devaluation of it's currency, the decision is no slam dunk.