Kemmer's call

Walking on thin Ice. Rates up HOME PRICES DOWN?

February 10th, 2011 10:28 AM by Kemmer Daniel Matteson

So just when i though the rates were stable the markets corrected once again...

With rates now pushing over 5%, almost a 1% increase in the last quarter. There is still a value problem in housing as a 1% increase in rates creates a 16% decrease in value for the same payment, so the afordability index gets worse.

 I don't know about you but I do not feel as if this economy is out of a recession... Unemployment dropped to 9% from 10%, but is that during the holidays with more jobs created? Stock market went from up over 10 % in the same time period. So signs would indicate that we are pulling out.. So should the government raise the Fed rate now to curb off inflation? or will the increases already put a damper on the markets.

In the long run though housing is still the best investment.

Locking in a 30 year loan for 5%  and waiting this out is a great investment... with more people renting now.. If you have money parked I would invest in a rental property or buy you own home

My home dropped over 50% from the high and I have lost all equity I gained in the last 10 years.. how much lower can it go?  Its like buying  10 yeas ago now with lower rates!

Kemmer Matteson

www.firstcaliforniafinancial.com

Posted in:General
Posted by Kemmer Daniel Matteson on February 10th, 2011 10:28 AM

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