Goat,
Uncertainty going foward as far as to when the big increase will hit.
As far as market conditons going foward every market is different and I notice you are in Iowa.Your market area is probably completely different than NJ.
If all things were to remain the same youre looking at about another 8% - 10% decrease to the end of the year depending on the market you are looking in it can be a little better or worse.
I couldnt tell you about Iowa.

James,

Thanks for the great answer. Such thoughtful responses bring much utility to this forum.

Regarding your quote, "I would buy and buy now if you are in the market. "

I see much more opportunity to wait for the fruits of higher fixed rates which is much lower prices for property.

I am a cash buyer...will not be taking on a mortgage.

What is your worst, most likely, and best case scenario for home prices going forward?

Goat,
Being realistic here take into consideration these items.
When a country continues to print money without regard to devaluing its own currency a number of things will happen and are already happening.
The less valuable our dollar becomes the less return on Treasury Bonds investors of our debt receive.By investors i mean "Foreign Countries"
Rates are as low as they are right now for one reason, our Treasury has been buying our own debt which artificially keeps rates low .They do this by running the printing presses in overdrive 24 / 7 without regard to the devaluing of the dollar.(That's like you paying your mortgage with your credit card every month).(Ridiculous)
As long as the government keeps buying Bonds rates will remain low.
The dirty little secret is that the Fed announced two weeks ago it will stop buying bonds.Last week the Fed put $110 billion dollars on the market for Countries like China to buy they declined.Why? because rates are so low there is no return on their investment.On that same day rates went from 4.75 to 5.75.OnThurs.the rate window opened and closed numerous times no-one was able to actually calculate what the rate was going to be.It was uncertain until the Fed announced whether they would buy up that $100 billion (there were no foreign takers.)
Until we allow rates to rise there won't be many lender countries to purchase our debt.In turn we can't keep printing money forever,so eventually we will have to raise rates.If you are old enough you may remember rates of 20% back in the late 70's we are headed back there.
Moody's has said we are in danger of losing our AAA rating we've had that rating since 1914.
Our yield curve as a county is up not down.Bad bad news as of today!
A good example is when you apply for a personal loan if your yield curve is up it means youre a credit risk someone will loan you money but it will come at a much higher interest rate.When your curve is down it shows your less of a risk to default on the loan.
As our nation's Yield Curve rises, how high of an interest rate do you think foreign countries are going to demand to take our exploding debt?
Since we cant continue borrowing money to pay off our debt and keep rates low doesn't it seem likely that rates will rise to attract foreign investment ?
Its around the corner sooner than most people think.
I would buy and buy now if you are in the market.
For any seller's out there also take heed and get your prices in line now, as the rates jump the less buyers are going to be able to afford those monthly payments.
Sell now or you'll be forced to do what every seller likes to say "I don't want to give it away" If you wait much longer you will.

Goat,
There is no way to know if/when 30 year fixed rates will hit 15%. Right now, mortgage rates are low and I hope this continues. If you are in the market to buy, all I can tell you is that rates are at historical lows and its a great time to obtain a 30 year fixed rate. You never know what tomorrow will bring or where rates will end up but today the rates are great!

Goat...

No-one has a Crystal Ball an 15% is not likely to occur within the next 3 years (my opinion)... we are on pins and needles and need to get serious as a nation to fix our financial infrastructure for good. Patchwork does not work for anyone and it definitely will not work long term.

Interest rates generally move slow but like the stock market anything that is volatile and sharply rise or fall. Right now our Financial Market is volatile. Sharp rises and falls are definitely possible. I think the New Administration is doing a fine Job keeping the Sugar on the subject but professionally, I'm not sure how long it will last.

If you are in the market to buy DO SO AND DO IT SOON. Watch your market, get 2-3 jobs if necessary, save and put a LARGE down payment on something that is currently 10-15% under market value. This will give you cushion for next year and after if the market continues to decline and no matter what if you can put down 40-60% your monthly payments should be so low you will not have to worry about foreclosure anytime soon (even if you get laid off, you should be able to sustain with super low payments and interest under 5%).

Bye for now... Take Care!

Jerel Washington, 2008 Circle of Excellence Sales Award Winner
Keller Williams Realty - Princeton
100 Canal Pointe Blvd
Cell: 609-933-9044
Office: 609-987-8889 x234
W