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Money Magazine Supports Buying Now

I just read an article afew days ago in Money magazine which validates what we have been telling our customers for months, which is buy now. The article talked about the fact that interest rates are for all intensive purposes hovering around a two year low and there is plenty of inventory available to choose from which makes it a buyer's market. It doesn't makesense right now to try to time the bottom of the market. If you wait 12 months to see if prices drop more, in the long run you could end up having higher payments due to the very real possibility of interest rates rising which they will more than likely do. Here's an example of what I mean. If you purchase a home now and have a mortgage of $250,000 with a 6% interest rate amortized over 30 years, your principal and interest payment will be $1,498.87. Now if you wait a year and get lucky enough to buy the same house and save $20,000 so that you can take out a $230,000 mortgage, but the interest rate rises to 7% then your principal and interest payment will be $1,530.19. So in this case you are increasing your payments by $31.32 a month, not taking into account that if you have your own home to sell, that you have probably lost the extra down payment moneyfrom the price decline in your home because you waited to sell. So all in all, if I were contemplating buying or selling, I would do it now, just like Money magazine says.

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