is true that the interest going up and the house values going down and why?

Question

the prices in fontana and san bernardino,ca, its better if we refinance now, no matter that we pay penalty

Answer 1

Read

http://www.foxnews.com/story/0,2933,187831,00.html?sPage=fnc.business/realestate

http://sandiegomarketmonitor.blogspot.com/

http://www.businessweek.com/print/magazine/content/06_37/b4000001.htm?chan=gl

http://www.voiceofsandiego.org/articles/2006/08/28/news/01exotic.txt

Answer 2

If you have a adjustable mortgage, yes absolutely consider locking in a fixed rate mortgage- remember that you might have to pay a penalty for paying off your existing mortgage early, consult a mortgage professional.

As interest rates raise less people will be able to be able to afford properties, in 1991 home interest rates were 10%, and when rates are this high banks get very particular who they lend money to, buyers will need to "actually qualify" based on income and credit score. The past few years have been resulted in a "fantasy market" a good indication of this is when lenders were accepting "Stated Income". Things are going to change quick in the next few months, just keep reading the numbers on actual number of sold homes, and compare that with the sold number a year or two ago..I predict it will continue to drop dramatically in the next few years. For those of us who were around in 1984 remember..for those who were not, well just hold on, we are in for a big ride..you will see lots of people walking from existing properties, foreclosures will explode..

Answer 3

Your market could stay hot, or at least not drop. The inland empire is still growing like crazy.

That said, we all have a finite amount of money. If interest rates go up, we can afford LESS house because more money has to go toward interest. So this usually will lead to a price drop.

As far as refinancing and penalties, no one can say - you haven't given us nearly enough info (and you shouldn't, either.)

Answer 4

I don't no which market you are referring to...however there are few economic principals which govern any real estate market...in any part of the world.
1) Demand and supply
2)Interest Rates
3)Inflation
4)Rent income
5) Alternative investments and its return on capital.
6) Government incentives for housing..etc.

Normally high interest rates are associated with inflationary conditions and with high Government borrowing.
Usually when the interest rates are high people would be reluctant borrow(disincentive) ,as they will have to pay high monthly installments, which they will find it difficult to service with fixed income. Specially if the rent income stays at the same levels. This can in turn depress the demand for houses which would lead to house prices to come down.
Trust it explains.

Answer 5

Simple supply and demand.

As interest rates increase consumers can afford less thus decreasing the demand.

Supply increases due to many reasons including:
All the buyers who took interest only loans find they can't afford the payments anymore and put the house on the market to get out from under it.

Builders continue to build.

Owners pass away so estate sales continue.

Foreclosures are usually higher (refer back to 1st item) and are back on the market.

Employment relocations continue.

Divorce.

These circumstances and others increase the supply while the demand has decreased.

Answer 6

no one knows whats going to happen with the interest rates. The appreciation in California real estate has been astronomic the past 10 years. There's no way it will continue. Will it crash? Not bloody likely. Will there be a pull back? more then likely.

Answer 7

The bubble has burst. Economists have been calling for it for a while now, and it's finally happened. People have been OVERpaying for a while now. It's like a pyramid scheme. It HAD to burst.