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Reply to "Why don’t people understand that low rates work against them?"
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[quote=Anonymous]Depends. Low interest rates hurt high downpayment folks double. Meaning as saving up can’t get any safe CD or money market to keep downpayment that pays a decent interest rate AND since you are putting a large downpayment higher rates effect you less and price is main issue. I bought my first home December 1999. We had a triple whammy that month of Christmas slowdown, Y2K and 8 percent mortgages. I put 120k down on a 280k house. I refinanced in in 2002 when rates fell. Rates fell again on 2009 a lot but by then I just paid off loan. It was only 160k to start with. Today I don’t own that home it goes for $620,000. I sold it 2-3 years ago but did notice buyers were offering to put down way less and with rates low harder to refinance to a lower rate down the road. My block was very stable. I lived there almost 20 years and vast majority of block was there 20-50 years My neighbor bought his house in 1978 when rates were sky high. Said had to put down 25 percent. Paid 40k and put down 10k. His mortgage was like 14 percent!! Him and wife ate Ramon noodles, pinched every Penny and aggressively prepaid mortgage in next few years. By 30 was mortgage free. Yes the low rates are great, but I am seeing an explosion of 50 something trade up buyers on my block with 30 year mortgages. There is no incentive to prepay. Plus with costs so high how can you. Housing still makes sense as Biden will cause inflation and a home is a housing hedge, mortgage rates still low and stock market doing great. That three legged stool can fall over easy. Not this year or next. [/quote]
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