Jr.'s Blog

A high interest rate and a low priced home versus a record low interest rate and a home with an inflated price. 

A lower priced home is much more valuable than a low interest rate because it provides you a variety of options:

-You can pay down the debt quicker with extra payments.  Since you paid less, each extra dollar you send will eat away the principal quicker.  Believe it or not mortgage burning parties did exist.

-Flexibility. If rates are high, it is likely they will stay that way or move lower.  If they move lower, future potential buyers have more flexibility in buying your home so the pool of buyers increases.  Today is as low as we go.

-Price. People seem to have forgotten that value comes from price, not the interest rate.  The banking industry has made a living off economic rents and interest rates have become so crucial that our central bank is now obsessed with keeping rates low only to keep housing values inflated.

 

 

Opinion from www.doctorhousingbubble.com