The Case Against

Waiting to Buy
Finally an article we can agree
on…

Copy this link to your browser to read a

compelling article on the impact of
rising finance costs on buyers.
http://www.time.com/time/magazine/article/0,9171,1713483,0
 KW Analysis - The Case Against
Waiting to Buy
 Interest rates have increased by 0.6
percentage points in 5 weeks
 January 24, 2008: 5.48%
 February 21, 2008: 6.04%

 Home prices have continued to

decline in some areas more than
others
 Let’s take a look at a few different
scenarios of continued…
 interest rates hikes
 home price declines
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 Home Price: -5% Home Price: -10%
$218, 900 $207,955 $197,010
Interest Rates: Interest Rates:
Interest Rates
+0.5% +1.0%
6.04%
6.54% 7.04%
Your Payment Your Payment Your Payment
$1,054 $1,056 $1,053
 Appendix
 Assumptions:
 20% down payment
 30-year fixed rate mortgage

 Data sources:
 Interest Rates: Freddie Mac Weekly
Mortgage Survey
 Home Price: NAR 2007 Median Home
Price