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Should I buy a home now or wait in case home prices drops more?

Tue, Dec 28th, 2010
Posted in Ask the Expert

Roxanne Johnson

Many opportunities will come from this market for the buyers that step in and take advantage. You have to live somewhere and in this market owning can actually be the same or cheaper than renting.

Here are six good reasons to make your move now:

  1) You can get a great deal - Will prices fall further? Sure they could. It's difficult to predict the bottom. IF you think prices will drop another 5%, simply make your offer 5% less today. Sellers want to know what buyers are thinking. Lower home prices give buyers the opportunity to get more for their money.

  2) Historically Low Interest rates - lowest on record since 1971. If inflation picks up, you won't see these mortgage rates again in your lifetime! If they drop, simply refinance to the lower rate. Low rates give buyers more purchase power.

For example: $100,000 at 4.83% / 30 yrs is approx $526 PI payment monthly

$100,000 at 6.5% / 30 yrs is approx $632 PI monthly

  In order to keep the same house payment of $526 monthly when interest is 6.5% the buyer would have to drop his purchase price to $83,500 more than likely getting less home for the money.

  3) Income Tax Deduction -Mortgage Interest & your property real estate tax is deductible

  4) Inflation Protection - a fixed rate loan locks your payment amount for the life of the loan, offering protection from inflating interest rates and out of control payments.

  6) Equity /Savings - Real estate is the most important investment most of us will make in our lifetime. IF you are not selling in this market than you will not loose anything, stay put, make your payments and ride out the storm; wait for the market to recover. Nothing is lost unless you bail. If you are purchasing now, your gain will be the low pricing, the low interest rates and time is on your side.

Nothing ventured, Nothing Gained, The only thing lost is opportunity.

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