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Whether sales price is more important than the interest rate depends on your perspective. It’s pretty much impossible to time the real estate market, but you can try to take advantage of the way the market moves.

A dramatic rise in home prices can slow home sales even when mortgage rates are low if mortgage availability is tighter.  Banks prefer higher prices to recoup their capital from their bad bubble-era loans, so they are offering 4% interest rates to prevent prices from going any lower.

However, most buyers prefer lower prices, but since the banks make the rules which determine market prices, low interest rates and high prices are what we get.

Buyers who purchase during a period of high mortgage rates may get the boost in appreciation from declining rates.  Low mortgage rates build equity faster through amortization but slower by appreciation. High mortgage rates build equity faster by appreciation but slower through amortization.

You can’t always predict how the market will move. But you can watch it move and get ready, set…GO!!

 

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