Should you wait to buy? You see the news, talking about falling prices. Logic says you should wait, right? Well like most decisions in life, it is never as easy or cut and dry as it seems. Let’s do some analysis to see.
Let’s say you wait a year and you do get the home at 10% less than today. How sure are you that rates will be as low as today? If the fed starts lowering short term rates, that causes inflation, which in turn hurts the long term mortgage backed bonds. Odds are, rates will be 1/2% to 1% higher in a year. If this happens the price reduction will wash with the higher interest. The main difference is you will have 29 years left on your mortgage instead of 30!
IF this is a home you only plan on keeping a few years, then WAITING is far better, but if it is a home you are going to keep 10+ years, then NOW is as good a time as any! Plus if you wait to long you won’t be able to take advantage of the $7500 Tax Credit.