Is House Price or Interest Rate More Important?

http://www.msn.com/en-us/money/realestate/is-house-price-or-interest-rate-more-important/ar-BBuzkuv

Its important to always look at the big picture and what your ultimate goals are for a specific purchase. Sometimes people get caught up over the exact purchase price but its important to remember many factors play into the transaction.

This scenario shows that interest is more important since the home values then went up.....too bad we don't have a crystal ball but rates are great right now which creates more buying power. The article also cites, down payment, HOA dues, movability, refinancing, & in 2010 the last time it was low prices and low interest rates.

interest rates were 7%. You saw a one-bedroom condo for sale for $100,000. You calculated your 30-year monthly mortgage payment on $80,000 – the amount you are mortgaging after a 20% down payment and your closing costs. Your monthly payment would be $532.

You wait 6 months and interest rate drops to 5%. However, a condo in the neighborhood you want now averages $120,000. You put down 20% plus closing costs and you are left with a mortgage amount of $96,000. Your monthly payment on a 30-year mortgage is $515. Your payment dropped by $17.