The market is picking up but some buyers are still hesitant to buy, the number one reason we have been hearing is that they believe the market is still going to drop lower. The housing prices may in fact drop lower but there is definitely not a lot of hope for mortgage rates to drop any lower. Some buyers don't give a lot of thought to mortgage rates but consider this:
A $350,000 mortgage 2 years ago at the best 5 year fixed rate, over 35 years would have cost $1910.26 approximately per month. Now a $450,000 mortgage with the same conditions cost $1923.41 per month.
A mortgage of $100,000 more will cost them the same amount per month! So yes, housing prices may drop but with interest rates so low it may cost them less per month if they were to buy now rather then wait till housing prices drop and mortgage rates to increase!
Cheaper home prices doesn't always mean monthly affordability. Get pre-approved, it costs nothing, saves time, there is no obligation and it locks in the rate, if rates go down you would receive that rate, but if rates go up........you are still secured at the lower rate!.
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