Just because home prices level out or even go down does not mean a home becomes more affordable.
Interest rates play a huge part in the affordability of a home. The payment each month is more important then the final sales price of the home.
From CNNMoney.com:
Mortgage rates eased slightly for the second week in a row after taking their biggest jump in four years two weeks ago, Freddie Mac said Thursday.
The government-sponsored loan buyer said the average rate on a 30-year fixed-rate loan slipped to 6.67 percent for the week ending June 28, from 6.69 percent the previous week.
Last year at this time, 30-year mortgage rates averaged 6.78 percent.
You should always talk to your loan officer about locking in your interest rate. If rates float up from the time you start to look and the time you buy, what you can afford might change over night.
CNNMoney also reports that David Duncan, the Chief Economist for the Mortgage Bankers Association, expects interest rates to top out around 7% by the end of the year.
If rates go up, would-be home buyers face higher monthly mortgage payments, cutting into overall affordability.
