Recently one of my sons and his girlfreind purchased a home for $400,000 and he asked me "Dad, what happens if my house loses 10% of its value?".  My answer was "Well, you are a math major, so you know you just lost $40,000 but let me ask you this.... If you buy that same house at 10% less for $360,000 BUT the interest rates were at 6% vs. the 4% how much more would you be paying a month?"

Interestingly, a $350,000 loan at 4% is $1,671 a month BUT if that same house dropped 10% and the loan is now $310,000 (same $50k down off a now lower $360k purchase price) that payment is $1,859 or a whopping $188 a month more for a $40,000 cheaper home! So it shows the importance of lower interest rates.   

Yes, I know at 4% they are higher than where we bottomed out in the high 2% range back in the middle of the recession, but they are still historically very low, well lower than the long time average rate of 8.2% (yes I am old enough to remember them peaking at about 19%).  So if you are concerned about our rising prices and still looking to buy a home, clearly now is one of the best times in recent years to do so.  Contact us today and let us know how we can help.