Surging mortgage interest rates threatened to squash Michael and Christine Hawkins' dream of home ownership. But this fall when the couple saw a Canoga Park condo languish on the market, they devised a plan.
They'd submit a "low ball" offer they could stomach if they cut back on vacations, shopping and eating out. In a year — when interest rates hopefully had dropped — they could refinance and free up their budget.
Last month, amid a decline in overall home values, the Hawkinses, both in their 30s, closed on the two-bedroom condo for 7% less than asking. But they may be stuck with a high payment for the foreseeable future, because if home prices keep falling, they might not have enough equity to refinance.
