"Gould 0738" wrote in message
...
I feel that the total payment (P+I) indicates the true "cost" of living
in a
house. That's why I'm saying that a jump in the rate from 5% to 6%
"only"
increases the cost of ownership by a little less than 12%.

Fair enough. Most people are "payment buyers" when it comes to a home.

But, don't forget you're talking a 12% increase in what is, for most
people, a
relatively major chunk of the household budget. The example you used in a
previous post examined a $100,000 mortgage and the payment went up over
$60 a
month. Most people are going to have a mortgage 2, 3, or more times that
amount
these days. Not all potential buyers are in a position to absorb 60, 120,
or
180 additional dollars a month and will want some help via a larger
discount in
the selling price.


How about a $250, 500, or $750 increase when their 4% 3-year ARM hits 8% in
5 years?