How much could you lose by waiting?

Besides the loss of the tax credit, the biggest game-changer facing buyers is a potential jump in mortgage rates. If the Fed moves ahead with its plan to stop buying mortgage-backed securities at the end of March, the rate on a 30-year fixed mortgage is expected to increase nearly a percentage point from today's 5.18% to 6.1% by the end of 2010, according to the Mortgage Bankers Association. On a $300,000 fixed-rate mortgage, that's an extra $174 per month.

But if home values are falling in your area, you don't have much to lose by waiting. If the house you want costs $375,000 today and you put down 20%, you'd pay $1,644 a month for a fixed-rate mortgage at 5.18%. Buy that same home for 5% less later on with rates at 6% and you'd only pay an extra $65 a month. If prices plunge 10% or more this year (as they expected to in 12% of the markets,according to Fiserv), you'll come out even or ahead.

 

  • March 07 2010 - Orlando
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (11)

Profile picture for Mark LeMenager
Brian I don't undertand this one.  You've just shown up on these sites in the past few weeks.  You are blogging and asking leading questions.  I assume that you are doing this to generate leads and make some money.  And now you write that you think it's a good idea to wait a year to buy.  So does that mean it's OK for you not to make any money selling real estate for the next year?
  • March 07 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
Enough of this crap. You are pulling articles from everywhere including this post from CNN. I'm sure that the reporter who wrote this article is thrilled that you failed to give her credit for her work or reference your article. This is spamformation. 

You look like a smart person, but you need to know that this post did nothing to advance your professional agenda on Zillow. Here is your audience profile. They do not think you're smart because you posted material that another person wrote word for word. They just crossed you off their list because they feel you wasted their time.
  • March 07 2010
  • 3Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Brian's post is the assumption only, assumes that the interest rate rise significant and assumes the home prices will drop 12% until next year, which are not certainly, depends on the areas, some are cheaper to pay for the mortgage+tax+insurance then rents, some are still expensive to buys then rents, in Florida, California, the people are buying the inexpensive properties, that explains why are the home prices dropping at the end of tax credit month.
{$1, $2, $3, $4, $5, $6, $7, $8, $9} the median price is $5.
And at the month ended tax credit, the home price rose 10% and 20% more sales at the lower end, the number are {$1.2, $1.2, $2.3, $2.3, $3.4, $4.5, $5.5, $6.5, $7.2, $7.9, $8.8}, 20% prices increased at the lower end 10% rose at the mid price, dropped at the high end, the median price is $4.5 (10% dropped, $5 VS $4.5)
  • March 07 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Mark LeMenager
Sunny, such language.  You have always been the most pleasant and polite person on here, even when the rest of us go over the top some times.  Keep that Sunny disposition.
  • March 07 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Sunny is handing out  whoopings and lollypops...and she's all outta lollypops!
  • March 07 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
You are right. I should have been more charitable and even tempered. I guess sometimes spam just get the best of me. Now where did I put that basket of lollipops?
  • March 08 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

i was looking for topics for us to talk about
  • May 06 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for xarfox
Everyone keeps saying interest rates will rise and that coupled with the tax credit ending, prices will decrease.

The interest rates have not risen.

Prices in my area haven't dropped at all, and many houses in "first time home buyer" price range, remain on the market.

More waiting maybe...
  • May 06 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Pacita Dimacali
Everyone reads, finds articles of significance, agree or disagree.

Here's one you should check out if you haven't already.

This is a blog by Steve Harney, renowned speaker, commentator, etc. Title of this blog: No tax credit. how will you wind up?

And here's what he observed about interest rates --- two weeks after the fed's exit
  • May 06 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for dacolan
Watching the effect interest rates and the expired tax credit will be interesting, but the bottom line to a sustainable recovery is significant improvement in unemployment and foreclosures.

There is nearly nine years worth of shadow inventory at the current sales rate of REOs.

And as long as price is fundamentally tied to incomes, there cannot possibly be any meaningful, sustainable appreciation until employment and wages vastly improve.
  • May 07 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

There's ways around the loss of the tax credit, etc.. To begin with, when one incentive is gone, something else usually comes in to take its place.

Also, if a down payment is of great concern to the buyer, there are new home construction sites that will pay all closing costs or partial to help them get into a home. New Construction is more than happy to work with Realtors also. You just have to remember to sign a registry/form when taking your Buyer. They tend to carry many incentives and warranties that are beneficial to the home buyer.

We also have the Neighborhood Stabilization program that can be beneficial to someone. So there's programs out there. The tax credit was just the latest and greatest.

Also, in this market, there are some traditional sales where the Seller can assist with closing costs, etc.

Yes, interest rates are expected to go up but they fluctuate on a regular basis anyway and there's ways around finding an affordable home for a Buyer. 

Don't focus on just one arena in Real Estate. Real Estate has a variety of multiple factors that can be worked with to the benefit of the buyer &/or seller, depending on your client and your knowledge.
  • May 08 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.