That is the question. Whether ’tis nobler in the mind to suffer the rental until prices further drop
Or risk losing an outrageous fortune,
To take a chance on buying a sea of troubles
Or by opposing, bring prices down?
To buy; To wait…..
A friend of mine is looking for a house and he’s getting cold feet. All of his buddies are telling him to hold off. There’s a recession a comin’. Prices will drop. He asked for my opinion.
After I told him that I’m not a friggen mind reader (although I sometimes claim to be), I advised him to look at the big picture. Too many people only think about the price of the house. Well, my friends, mortgage rates and taxes are every bit as important. Think of it this way: You pay for the house once. You will be stuck with those interest rates for 30 years. Same with the taxes. And they keep going up.
You have to do the math. If you wait, you may save an extra $50k on a home, but it’s not worth anything if the interest rates are at 8%. Right now they are below 6% and may drop even more at the end of the month.
The market has already softened. It could go down even more and it certainly won’t be going up any time soon.
My opinion? I’d hold off and see if the feds announce some good news at the end of the month and then cautiously hit the pavement.
PS: I should give a shout out to the ever so fabulous mortgage broker who alerted me to the fact that it might be refinance time for me if rates drop any more. Give a big hand to Jonathan Meadors of Preferred Empire Mortgage! He kicks ass! jmeadorsATpemconlineDOTcom
4 Comments
I do believe I will be going into refinance mode soon too. I was at a fixed 4.87% for 5 years and then it goes adjustable. Five years (holy crap!) is up this April.
Girl! You better get your ass in gear! You are very lucky we’re going into recession or you’d be in trouble!
Best upstate mortgage broker: Liz Moeller at Centennial in Kingston.
http://cmloans.com
Terrible terrible time to be buying. There’s a reason prices are dropping and sales are stagnating, and its not soley due to subprime like the MSM lazily claim. Housing prices flat out just do not align with actual income any more.
You also go from saying that you are stuck with an initial interest rate for 30 years, to mentioning that it might be time to refi – aren’t those conflicting statements??
Ok, I guess I should’ve said “You will be stuck with interest for the next 30 years. It’s anyone’s guess whether rates will come down so you can refinance.” Something like that? My point is: if the rate is at an all time low, that’s a huge factor.
How much lower do you think home prices will fall? I don’t know. If you can look into your crystal ball, let me know. I’ll start saving my pennies so I can buy my next Brooklyn Heights brownstone for $300k with an interest rate of 2%.
😉
At the end of the day, here’s me, personally: I have no patience. And I’m an optimist. If I needed a place to live, I wouldn’t put it off. I’d make it work. If others can put off plans, good for them. Either way is a gamble.