[eastbay]

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If you save $20,000 on a $400K home (5% decline) by waiting 12 months, but in that time the going rate on a mortgage increases by 1% (from 6.5% to 7.5%) the increase in monthly payments will eat away the costs savings in less than 7 years of payments. While we are in a time of historically high housing prices, we are also in a time of historically low interest rates. Just something else to think about if we are recommending trying to time markets.


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This argument doesn't really hold water, because prices are highly correlated with rates (inversely, of course). If rates surge, prices will fall even further. People choose their price point by their monthly PITI.

eastbay