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Old 06-17-2014, 04:33 PM
 
9 posts, read 11,850 times
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Ok, here's my opinion. I have several friends who have recently sold homes and my husband and I are in the process of getting our home ready to sell. The market is crazy right now. Homes are going for asking price, some a bit lower, some a bit higher. It's very competitive for buyers (but great for sellers!). My advice is to stay where you are for another year or so and see how the market goes. Chances are prices will come down a bit and you'll have a little more saved up and can afford something you love instead of just bidding on houses because they're all getting same-day offers.
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Old 06-17-2014, 08:32 PM
 
Location: North Texas
24,577 posts, read 34,233,458 times
Reputation: 28402
Quote:
Originally Posted by hiandhello View Post
Ok, here's my opinion. I have several friends who have recently sold homes and my husband and I are in the process of getting our home ready to sell. The market is crazy right now. Homes are going for asking price, some a bit lower, some a bit higher. It's very competitive for buyers (but great for sellers!). My advice is to stay where you are for another year or so and see how the market goes. Chances are prices will come down a bit and you'll have a little more saved up and can afford something you love instead of just bidding on houses because they're all getting same-day offers.
Prices aren't going to come down. The rate of increase might, but interest rates will go up in tandem. They're already higher than they were 12 months ago.
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Old 06-17-2014, 09:32 PM
 
99 posts, read 118,237 times
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Originally Posted by BigDGeek View Post
Prices aren't going to come down. The rate of increase might, but interest rates will go up in tandem. They're already higher than they were 12 months ago.
I would assume that unless there is significant increase in wages that an increase in interest rates would put pressure on the increase in home prices. I agree that DFW is slightly different because of the number of jobs moving into the area, and prices should hold up unless interest rates rise significantly.

Monthly P&I per $100,000 on a 30 yr fixed:

4% - $477
5% - $537 (+$59)
6% - $600 (+$63)
7% - $665 (+$66)
8% - $734 (+$68)

While an increase from 4-5% isn't a major change at $59 per month, consider that it is an additional payment of $1425 annually on a $200,000 mortgage. If a first time homebuyer is paying 28% of their income as their mortgage payment, their gross wages would have to increase $5,100 to compensate for the increase.

Likewise, at 4% the P&I on the $200,000 mortgage would be $955 /mo. If that is all that the buyer could afford, the max amount they could spend if rates increased 1% is $178,000.

It's also worth considering that home demand may be impacted by rising interest rates on student loans, further eroding the purchasing power of first time home buyers.
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