[Freedom_Is_Not_Free]

I completely agree with you, but mortgage rates are part of “affordability”. Homes have to come down in price but affordability will take longer, homes will sell more slowly, and inventory will take longer to clear if homes come down in price and mortgages go to 15% than if homes come down in price and and mortgages stay at 6%. This isn’t obvious?

You might answer, “homes just have to go lower still if lending rates rise”. Well, yes, which will require longer to sell off inventory, which will result in more foreclosures than if the inventory is reduced faster, and which will hit the economy harder. This isn’t obvious?

[Afronaut]

If you can buy a house much cheaper than when the rate was under 6 percent, is that not a wash? You can always refinance if the rate drops.

I think this is good. Keeps people who cannot really afford a house away. We don’t need anymore of those folks.

[org.whodat]

I have sold hundreds of homes, the main question the buyer always asks, is how much is the payment, including insurance and taxes. Even when the rates were as high as 12% that was the question. If they plan on living in and paying off the home they need to be able to make the payment. Just dragging a warm body through the door and getting it a mortgage results in what you have today. The difference between a 100,000 loan at 5.5% and at 7% for 30 years is only about a hundred dollars a month. The difference between a 150,000 loan and those rates is $300+, both are net of escrow for tax and insurance.

[org.whodat]

http://mortgage-x.com/calculators/amortization.htm