Should I Buy or Should I Wait?

Interest rates have, for the most part, been on the rise since January. On January 24, 2008 the national average interest rates were at a low, with an average of 5.48%. On of June 5, 2008 interest rates averaged: 6.09%.

WHAT DOES THIS MEAN TO YOU?

Well, if you’re a buyer sitting on the dock, it’s time you jump off now before you miss the boat completely. Most buyers who are looking today, are searching for a deal. Here in my St George Utah real estate market, prices are lower than they have been in years. Buyers who were priced out of the market during past years are currently able to find a nice selection of homes at great prices. Some buyers are playing their hand at the "wait to see how low the prices will go" game. This is likely going to backfire.

HOW MUCH WILL I PAY FOR A HOME IN ST GEORGE?

Here is an example to consider, in January when the national average interest rates were 5.48% the Principal and Interest (P&I) payment for a $300,000 loan would have been $1,699.60. Today, utilizing the current rates of as of June 5, 2008 at 6.09% that $300,000 loan payment would be $1,816.05

The payment difference is $116.45 or the equivalent of paying approximately $21,000 more for the home when the rates were 5.48%. With the rates at 6.09% to achieve the same payment (of approximately $1,699.60) your loan would have to be $281,000. This shows that in a period of only four and a half months, you would need to find the same house priced $19,000 cheaper. Over the months, prices in St. George Utah have come down, but only by an average of a few thousand dollars. Waiting longer to purchase could mean you will pay an even higher interest rate. Those who are making a purchase dictated by the monthly payment may end up purchasing less of a home (smaller, older etc…) if they wait for prices to drop while the interest rates continue to increase. I have calculated these figures utilizing the mortgage calculator on my website and obtaining the national average rates from http://www.mortgagenewsdaily.com/mortgage_rates/

INTEREST RATES COULD DROP

This is a gamble. Buyers who have placed this bet since January may now be realizing that the bet is not paying off. The "house" wins. My advice: If you are ready to buy, buy now. If you’d like to pay a little less…OFFER a little less. Motivated sellers are willing to negotiate. Partner yourself with a good Buyers Agent who can negotiate a deal today, at tomorrows price! The purchasing boat is pulling away from the dock, dont sink yourself with increasing mortgage rates.

Date: Wednesday, June, 11th 2008 @ 02:21:13 PM
Views: 130

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