There's no question that they are linked..... but what the reality is is that prices don't go UP --- and buyers are forced to buy down to what they can afford on a monthly basis as rates rise... so while the two are related - the rise in rates doesn't mean that suddenly houses are going to go down 25%. It just doesn't happen. What you really see is that houses go UP quickly (too fast) as the rates are low.

What I was trying to show with my rate example is that while you might get a house a smidgen lower -- you'll more than make up for your "deal" in interest.

The perfect storm to buy has been the last two or three years --- falling house prices with the lowest rates in 50 years. Not likely to repeat that scenario --- as houses are already getting multi bids - prices inching up -- and it's almost a given that rates will climb from these historic lows.

Let's also examine that chart a bit closer -- as we all know that the super low rates caused the spike in purchasing power and home values ---- which is also the PLUNGE in that nice spike up. Painful for many and a historic aberration.

A report just came out and said that home prices ROSE 8.3% in all but four states. That's the largest gain since 2006.


THAT is why interest rates will start to creep up --- IF --- IF --- that continues. Money is a market. More demand to borrow - causes the rates to go up. Money is no different than anything else -- if there is demand then things go UP.

So back to the house/interest rate question. Those that haven't already jumped in with both feet are already seeing that once in a lifetime opportunity (Low house prices - lower interest rates) slip away.

The FED is still artificially holding rates down. Once they see the employment picture brighten and the housing sales start jumping up... they'll ease off the brake and let the rates rise.


FOR INVESTING 102

One of the oldest sayings is ---- "when interest rates fly - stocks will die"

We have a long way to go for the interest rate (treasuries and CD's and Money Market funds) to start to be attractive enough to pull money out of stocks and into interest bearing investments. But for 102 -- you need to learn to be aware of these interactions and trends.

This is interesting! Shows a complete lack of planning and understanding of money.... Or even "life" as in. Your future?!?!?


http://m.cnbc.com//id/100434965

Ameriprise tried to sell me annuities..:confused59: Before the crash in 2006/2007...I stayed in Cash after selling a home....That way I was in control of the money in 2009...

Also people need to do the research..One study says you need 11 times your yearly spending to survive retirement...

I say you need 14 to 17 times your yearly spending in funds to survive...And it must be invested for dividends , ect.... And not in cash.



Filling out the paperwork now for the 3.75% 30 year fixed right now...

I think that holds true if your expenses/lifestyle stays the same, at least from what I've heard... I am planning on 1.2 to 1.5 with the hopes of 5% ish for my return, bout yrs 10 to go, hopefully no more....we'll see...and that's a little under what I make now. Mike

I'm just not going to stop working :lol:

Seriously, my second life will be doing something that still generates income but is on my own terms so I can "enjoy" retirement. In all honesty, the idea of just lounging around while traveling around bores me. I'd have to do something to keep me going. Might as well make some money at it if I can.

Once the govt gives its blessing, and finds a way to tax pot, its going to be a VERY lucrative industry...

5 Marijuana Stocks Going Crazy (And This Could Be Just The Beginning)
http://seekingalpha.com/article/1156...g?source=yahoo

The thing is - we all know that "expenses" are allowed to grow to match or overtake income. Usually without corresponding savings/investment.

I can tell you that you WILL spend MORE in retirement than when you're working. You just don't have time to spend when you're working all day. Wait til ya got nothing to do all day - every day - and someone says "hey! Let's all go to X...." You're in! :lol:

You don't spend on the same stuff.... but you'll spend it on hobbies - trips - dinning/entertaining - and MEDICAL. Ya get older - insurance goes up - trips to the doc increase - meds you didn't use to need are now required etc.

The problem with retirement "lately" has been the utter lack of returns. If the returns get better -- your investments grow quicker (compounding) and when you retire -- getting 8% on a million is WAY better than getting a lousy 4%!!

The keys to this ---- by retirement have your expenses down to basics ---- and investing EARLY so it has time to compound.... One has to go UP and the other must go down. Or -- you live for 25 or 30 years wish'n' you'd have done a better job on something you had plenty of time to prepare for.

It used to be you inherited a little from your folks.... but I'm telling ya that about the only thing most will inherit any more is the debt from taking care of them in their final years. You/they will have blown thru the house - savings - and anything else not nailed down if they stroke - or get cancer - or require assisted living. I can tell you this via my own personal experience with my parents. 4 years of assisted care --- ya got nothing left. And these days people live longer but then they seem to need more care in the end.

Greg..

I call it the "Burn Rate"...How much you are burning through your money..

My big things for 2013 was to make sure we stay Insured ,YES, and second was to refinance the Home loan...YES, just locked in a 30 year 3.75% fixed this morning ..:thumbsup: :thumbsup:

We have also stopped the rate of going through money, so we have enough to last..