US Real Estate

US Real Estate

As you have noticed, interest rates are on an upward move and many variable interest loans are due for a rate increase.

That means that people will have to pay more each month for their mortgage payment.

On average, a one percent increase per hundred thousand dollars equals approximately eighty five dollars a month. That's close to one thousand dollars a year times however many hundred thousands the loan amount is. It is not unusual to recognize a whopping four thousand dollar annual mortgage payment increase.

You probably have also noticed the reports that sales are on the decline and that can negatively effect home values.

The last three to four years, many people have mortgaged their houses up to ninety-five to one hundred percent of their value, with combined first mortgages and credit lines.

That can spell disaster in a hurry, especially if the house value declines, which is the next step following declining sales. This is already happening in some areas.

Can it be the Nineties all over again? Maybe not.

The Fed has indicated that there will be increasing interest rates to keep inflation under control, gold is in the 600s, the deficit is skyrocketing... in other words, the signs are not encouraging for the times to come.

I think the market will recover eventually, as it always has. People that have fixed rate mortgages and equity will be able to survive any fluctuation as they have in the past

"We will either find a way, or make one."