hazards of timing the market

According to the January issue of REALTOR Magazine, some buyers are holding out because they are gambling that home prices will come down and interest rates will hold steady or drop. The impact of changing interest rates on the actual monthly costs of home ownership is truly amazing! Even a 10% drop in home prices is immediately nullified by a mere 1% increase in interest rates on a 30-year mortgage loan.

And the timing gets even better if you are a first-time homebuyer who qualifies for the $8000 tax credit. Buyers who are holding out for the perfect time when both home prices and loan rates are at optimum levels could find themselves holding an empty bag!