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Some math people seem to be forgetting.

Example:

A: Assume you finance $400,000 with no money down, 5% at 30 years.

Monthly payment: $2,147

B: assume the market falls 20%, you finance $320,000 but interest rates continued to rise, and you get 7.5% for 30 years.

Monthly payment: $2,237

For you to match current prices, the market would need to fall about 24% if interest rates rose to 7.5%

If they go to 8% or more, you’ll need the market to fall closer to 30% to break even compared to today’s market.

So what would they tell me? (Someone with the belief that rates won’t be lower for the next year or so at least.) I also don’t believe we’re going to see prices tank 30%.

Buy now.

submitted by /u/superavg
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/uf7qgp/some_math_people_seem_to_be_forgetting/
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