Don't be a Stooge

Don't shoot yourself in the foot.  Yet another news piece discussing the housing market, interest rates, and bankers urging folks to take advantage of really low interest rates.  Really low interest rates don't help you.  The total package (house price and interest) is fixed to median income; when one goes up, the other goes down. 

The gloriousness of your house is determined by your income, and that of your townsfolk.  If, in the next five or ten years, median income rises in your town, so will house prices (interest rates unchanged) and you'll make a killing.  If not, then house prices will bounce around the value they have today; unless, of course, median income continues to fall and/or interest rates rise.  If you're old enough, or can find folks who are, remember what happened to folks who bought houses in the late 1970's.  Interest rates where very high, prices were very low, and as interest rates fell, prices rose.  All that unearned capital gain fell into their laps.

Never forget the Prime Directive:  the bankers/builders/sellers intend to suck up the entirety permitted mortgage payment, and they trade principal (the house price; to the builder/seller) for interest (to the bankster).  There's nothing you can do about that.  They can, and will, and do, take every last morsel.