In a market where values are down, a buyer might believe it would be prudent to wait before purchasing. However, as many people have been discussing this past week - it is important to remember that the cost of a house is not determined by price alone. The cost of any large ticket item is determined by price AND financing.
Though interest rates for mortgages are at historic lows, there are no experts predicting that they will stay there. In fact, almost all experts have been saying that interest rates will rise significantly this year. However, several unexpected events (including everything from recent fluctuations with the Euro to the Gulf oil spill,...) have held the rates down.
Every potential homebuyer needs to know that the cost of their new home could dramatically increase when rates raise - even if prices decline! Remember, a one percent increase in rates right now would wipe out a ten percent fall in prices.
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