In order to participate in the GunBroker Member forums, you must be logged in with your GunBroker.com account. Click the sign-in button at the top right of the forums page to get connected.

Realtors-a question?

alledanalledan Member Posts: 19,541
edited September 2002 in General Discussion
When the interest rates go down it appears that the cost of houses go up and when the rates go up the cost of houses seem to fall.
We know that Greenspan yanks the chain on the interest but who does the yanking for the houses?
· Share on FacebookShare on Twitter

Comments

  • 22WRF22WRF Member Posts: 3,385
    edited November -1
    As with anything for sale, the property is worth what a buyer is willing to pay.
    When Interest Rates are low the buyer can qualify for a larger loan therefore and pay more.
    Still the property must appraise for the amount of the loan or more.
    I don't think in my area the it is true that low rates make for higher prices.

    I Refuse to be a VictimGrumpy old man

    Life, Liberty, and Pursuit of All Those that Threaten it
    · Share on FacebookShare on Twitter
  • Rafter-SRafter-S Member Posts: 2,173 ✭✭✭✭✭
    edited November -1
    The main driver of the cost of houses and money to borrow is supply and demand. When labor, material and land to build on is in high demand, the supply usually gets short--thus, higher prices. Same with money. When banks get loaded with money (not enough borrowers), they lower interest rates to intice more people to take out loans.

    My humble opinion,
    Rafter-S
    · Share on FacebookShare on Twitter
  • interstatepawnllcinterstatepawnllc Member Posts: 9,390
    edited November -1
    Rafter-S, please enlighten me as to the meaning of your handle?
    · Share on FacebookShare on Twitter
  • gruntledgruntled Member Posts: 8,218 ✭✭
    edited November -1
    Most people buying a house care only about the monthly payment.
    Unless you're paying cash the price is usually of no concern. With lower interest rates the the same monthly payment will buy you a more expensive house.

    The problem with this is that when interest rates go back up (and they will with the big new Federal deficits) the price of houses will fall & people will be stuck with houses they can't sell because they will owe more on them than they can sell them for.

    This will lead to an entire new round of bank problems as the banks will once again be stuck with 30 year loans with low interest rates & a large number of people who will walk away from properties they have a negative equity in.
    · Share on FacebookShare on Twitter
  • Rafter-SRafter-S Member Posts: 2,173 ✭✭✭✭✭
    edited November -1
    quote:Rafter-S, please enlighten me as to the meaning of your handle

    interstatepawnllc-- Rafter-S is the name of my place--a cattle ranch. The brand is a letter "S" with an inverted V over it, which makes it look like a rafter over the letter S. The letter S is the first letter of my last name.
    · Share on FacebookShare on Twitter
  • interstatepawnllcinterstatepawnllc Member Posts: 9,390
    edited November -1
    I see, thanks for sharing.
    · Share on FacebookShare on Twitter
Sign In or Register to comment.