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  • Digg it UP - Housing Market Cools but Shouldn't Fizzle

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    The good news for homeowners is that even though rates are going up, the study found that only 10 percent of homeowners with adjustable mortgages will be looking at higher house payments in 2006. The not-so-goo

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    According to a recent study by Harvard University's Joint Center for Housing Studies titled "State of the Nation's Housing," it appears that although the prices of homes won't increase at the giddy levels of the past few years, they shouldn't experience sharp declines. The main reason for that, according to the study, is that most cities have curbed excessive building and haven't seen severe job losses.

    Interest Rates

    Approximately a million people bought homes last year, using a combination of low down payment loans and flexible financing options, in spite of higher home prices and rising interest rates. The majority of those buyers will have a fixed rate on their loans, even if they're adjustable loans, for the first three to five years. If their loans were interest-only, the principle will begin becoming due after a similar amount of time.

    The good news for homeowners is that even though rates are going up, the study found that only 10 percent of homeowners with adjustable mortgages will be looking at higher house payments in 2006. The not-so-good

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    years, they shouldn't experience sharp declines. The main reason for that, according to the study, is that most cities have curbed excessive building and haven't seen severe job losses.

    Interest Rates

    Approximately a million people bought homes last year, using a combination of low down payment loans and flexible financing options, in spite of higher home prices and rising interest rates. The majority of those buyers will have a fixed rate on their loans, even if they're adjustable loans, for the first three to five years. If their loans were interest-only, the principle will begin becoming due after a similar amount of time.

    The good news for homeowners is that even though rates are going up, the study found that only 10 percent of homeowners with adjustable mortgages will be looking at higher house payments in 2006. The not-so-goo

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    Approximately a million people bought homes last year, using a combination of low down payment loans and flexible financing options, in spite of higher home prices and rising interest rates. The majority of those buyers will have a fixed rate on their loans, even if they're adjustable loans, for the first three to five years. If their loans were interest-only, the principle will begin becoming due after a similar amount of time.

    The good news for homeowners is that even though rates are going up, the study found that only 10 percent of homeowners with adjustable mortgages will be looking at higher house payments in 2006. The not-so-goo

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    ose buyers will have a fixed rate on their loans, even if they're adjustable loans, for the first three to five years. If their loans were interest-only, the principle will begin becoming due after a similar amount of time.

    The good news for homeowners is that even though rates are going up, the study found that only 10 percent of homeowners with adjustable mortgages will be looking at higher house payments in 2006. The not-so-goo

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    The good news for homeowners is that even though rates are going up, the study found that only 10 percent of homeowners with adjustable mortgages will be looking at higher house payments in 2006. The not-so-good news, especially if you happen to be someone who was counting on a continuation of the runaway housing trend, is that home prices will be slowing.

    Wages and Housing Prices

    Part of the reason for the slow-down is that wages aren't keeping pace with housing prices. The study found that from 2001-2004, the number of American households that spent more than half their income on housing rose to 15.8 million, which represented a 14 percent increase.

    The Harvard study suggests that if state and local governments don't find ways to encourage more affordable housing, U.S. homebuyers may be in for a difficult time in the future. With so much of a middle-income family's income being spent on housing, important things as IRAs and savings will begin to fall by the wayside just to keep a roof over their heads, which will put even more strain on

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