From today’s Wall Street Journal Online:
My younger sister Melissa and her husband Joe are ready to move.
And they know what they want …
Last summer Melissa and Joe found the perfect place — a roomy home near us on a fair-sized lot for a hair under $250,000 …
Unfortunately, after making a full-priced offer, someone else got the house at the last minute, by offering $10,000 more.
That was too much for my sister; deeply disappointed, she and Joe stopped looking …
Recently she’s seen reasons for hope … Melissa decided it was time to look around again, and last weekend she asked me to come along on a tour of open houses in her price range.
So, what did they find? House after house listed at prices within her sister’s price range.
Despite this fact, “Melissa and Joe decided they weren’t quite ready to wade back in: They’ll take the market’s temperature again in the spring.”
The reporter’s sister then tried to figure out how much she and her husband could afford to borrow.
When they began looking, Melissa believed homes around $250,000 to $260,000 were in their price range, based on the going mortgage rates. But as rates have marched steadily higher, the maximum they can afford to borrow has become a bit of a moving target.
The sister now estimates that the most they can afford is a $230,000 loan (assuming they put $20,000 down).
Ouch. Prices have dropped, but interest rates have gone up.
That’s a tough turn of events.
I have to say, I wonder if the sister and her husband will ever buy.
Although other people will undoubtedly have their own, different, opinions, I feel as though her sister and her husband are very indecisive.
The sister’s like Goldilocks. She wants rates low and prices low, etc., etc., etc.
I don’t think she’ll end up ever finding a home that’s just right for her.
Complete story: How Low Will Home Prices Go? A Reporter Goes House Shopping – By Terri Cullen, The Wall Street Journal Online