March 9 clocks change so does the real estate market

With the time change begins a change in the mindset of many home buyers... More daylight, better weather, great interest rates are all a recipe for a great early spring market nationwide... but especially in Atlanta!
TOP STORY:Where are all of the buyers?
It’s time to get potential home-owners to go ahead and buy in this so-called “buyer's market”

While today’s market plays to their advantage, buyers, who should be swooping in to make the most of reduced housing costs and favorable interest rates, are sitting by, waiting.

It is up to you, as a competent and informed real estate agent, to mobilize your potential buyers to invest in home ownership now. When the market turns, today’s bargains will be yesterday’s missed opportunities.

While it is conceivable that home prices may drop further, it is likely that these decreased prices will be accompanied by increased financing costs due to rate cuts by the Fed. This means that any money saved on paying less for a house in a few months time will be offset by your client having to pay off their mortgage at a higher interest rate making “playing the waiting game” a waste of time (and very little fun).

This rate increase isn’t just speculation. Just a couple of weeks ago, in early February, the fixed mortgage rate jumped a full half-percent, making it the fastest rate increase in 20 years.

The table below demonstrates how even as home prices may drop, monthly mortgage payments basically stay the same; due to increased interest rates:

Scenario 1: Prices decrease by 5% and interest rates increase by 0.5%
Scenario 2: Prices decrease by 10% and interest rates increase by 1.0%
Today
Scenario 1
Scenario 2
Home Price
$218, 900
Home Price: -5%
$207,955
Home Price: -10%
$197,010
Interest Rates
6.04%
Interest Rates: +0.5%
6.54%
Interest Rates: +1.0%
7.04%
Monthly Payment
$1,054
Monthly Payment
$1,056
Monthly Payment
$1,053
Table: Kadlec, Dan. "Ignore the Headlines!" Time 25 February 2008
Why should your clients spend months in a situation that they want out of when they can begin their new lives in their new home today, with less interest?