Sunday, February 20, 2011

A Math Problem

Currently 30 year fixed mortgage interest rates are at about 5.000%. I’m pretty sure that we will see interest rates rise this year to the 6.000% range. So I did the math and this is what I found out what could be purchased at Marina Towers.

$1,000.00 per month will get you $186,281.62 in purchase money at 5.000%
$1,000.00 per month will get you $166,791.61 in purchase money at 6.000%

This equates to a net loss of $19,489.99 in purchase power. That’s 10.5%!

I don’t think we will see housing prices drop an additional 10.5% from now. It’s time to get in while the getting is good.

We cannot predict when condo prices at Marina City will hit bottom or if they already have, but most can agree that interest rates are steadily going up from here. Think about how rising interest rates limit your home buying power.

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