Interest rates are still hovering near 30-year lows (see graph below). But waiting to time the market is a dangerous – and losing – game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be multi-millionaires. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower.
And home prices don’t necessarily move in unison with interest rates. So, if you decided to roll the dice and wait to purchase a home, and the price were to actually drop $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up a half-a-point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.
In short, the smartest and safest time to buy is now. We know that interest rates are low today. We know that home prices are down in most of the country, but in Atlanta they actually rose 1.7%. We know that there are plenty of homes on the market to choose from. We know that sellers are willing to entertain an offer. And we know that builders are willing to offer attractive incentives. Any or all of these favorable variables could change for the worse six months from today.
Interest rates greatly affect your mortgage and monthly payment. To learn more about the basics of mortgages, click here.
30-year fixed mortgage rates national yearly averages
