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When faced with a market that has high house prices and low mortgage rates.
What should you do?
Importance Of Mortgage Rates
Chances are, you are either going to be faced with a high house price and low mortgage rate today, or a slightly lower house price and a higher mortgage rate. The key here is that mortgage rates are likely to rise more than house prices are likely to fall. For example, it is likely that mortgage rates may rise, for example, from 6% to 8%, but it is pretty unlikely that house prices will drop enough to actually make your mortgage payments less. It can happen, but the odds are against you.

Length of Stay
Few of us can predict where life will take us in five, 10 or 15 years, but these are some things you should consider when deciding whether to continue renting, or to dive into the real estate market. Due to the incredible pace of house prices in recent times, and the typically low rate of return you get from a house in the first place – if you are only considering staying put for a couple of years, then you could find less equity in your house when you come to sell than when you started. Alternatively, this money could have been put to use in savings, which would probably result in a high overall rate of return. However, if you follow the age-old advice of staying put for several years, then buying now makes a lot of sense, since any drop in house prices should have recovered by now.

In the Lights
Compact fluorescent lamps (CFLs) reduce the energy used for lighting by one-third and are available at most home stores and some warehouse club stores. A CFL can last 10,000 hours, whereas a regular bulb only lasts 1,000 hours. They can be used wherever you would use a regular bulb. On a dimmer switch, however, make sure that you use only a CFL that is labeled for such use. Over the long-term, you can save $20 to $30 per bulb.

Type of Market
Finally, you need to take into account what kind of market you are in. Some areas, such as the two coasts, have high appreciating properties, and you get relatively little house for your money. In these types of markets, house prices are more volatile, and more likely to swing both up and down, meaning that you could be caught on a down swing. Therefore, the conventional wisdom is that these areas require long-term holding onto in order to make good your investment. In other markets, such as Houston, where house prices are less volatile and you get quite a lot of house for your money, you can buy a house and then move after only a few years and typically either be even or ahead!

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