What gets me is how much interest rates are underrated by buyers. Every buyer is trying to ‘time the market’ and sadly the truth is that the market moves so fast that it is extremely hard to hit the bottom perfectly. Let me do a simple example for you at no charge:
$200,000 Mortgage
6% Interest Rate
30 Year
= $1,199 Payment
Let’s say the market drops another 10% but the interest rate goes up 1%.
$180,000 Mortgage
7% Interest Rate
30 Year
= $1,197 Payment
The point is that the payment is relatively the same in this example and that buyer’s should be equally as concerned about interest rates going up. I believe that the economy will get overstimulated in the next 9-12 months and the fed will try to control it by beginning to inch interest rates up to 8 or 9 percent.
So in my professional opinion, I really think over the course of the next 6 months is the ideal time to buy a home if you’re still on the fence. It’s funny to think that when it’s a seller’s market, buyers want to buy and when it’s a buyer’s market that buyer’s don’t buy.
