Why Wait? The Hazards of Timing the Market
Buyers Who Choose to Wait “until prices come down more” are choosing to gamble.
Single red percent symbol among many dollars
The issue we’re seeing with waiting to purchase when prices go down… are that they’re also risking the potential interest rates will slowly creeping be up.
If you wait for prices to go down, you’re at risk to be getting a higher interest rate.
Here’s a good flow chart:
Buy Now:
Home Price: $200,000
Interest Rate: 6%
Payment: $1,199/month
Scenario #1:
Home Price: $190,000
Interest Rate: 6.5%
Payment: $1,201/month
Scenario #2:
Home Price: $180,000
Interest Rate: 7.0%
Payment: $1,198/month
If you decide to wait for prices to drop, and the interest rates end up increasing…. You’ll have to wait for prices to drop by 10% in order to offset the 1% increase in interest rates. If you’re buying cash then the world is your oyster… if financing then perhaps you should take advantage of the current inventory and current interest rates. Hope this helps!!
Rate Updates from FreddieMac: http://www.freddiemac.com/pmms/
| 2018 | ||||||||||
| PRIMARY MORTGAGE MARKET SURVEY® | ||||||||||
| Summary page with all rate types – U.S. averages | ||||||||||
| U.S. | 30 yr | U.S. | 15 yr | U.S. | 5/1 ARM | U.S. | 30 yr FRM/ | |||
| 30 yr | fees & | 15 yr | fees & | 5/1 | fees & | 5/1 ARM | 5/1 ARM | |||
| Week | FRM | points | FRM | points | ARM | points | margin | spread | ||
| 1/4 | 3.95 | 0.5 | 3.38 | 0.5 | 3.45 | 0.4 | 2.75 | 0.50 | ||
| 1/11 | 3.99 | 0.5 | 3.44 | 0.5 | 3.46 | 0.4 | 2.75 | 0.53 | ||
| 1/18 | 4.04 | 0.6 | 3.49 | 0.5 | 3.46 | 0.3 | 2.74 | 0.58 | ||
| 1/25 | 4.15 | 0.5 | 3.62 | 0.5 | 3.52 | 0.4 | 2.75 | 0.63 | ||
| 2/1 | 4.22 | 0.5 | 3.68 | 0.5 | 3.53 | 0.4 | 2.75 | 0.69 | ||
| 2/8 | 4.32 | 0.6 | 3.77 | 0.5 | 3.57 | 0.4 | 2.75 | 0.75 | ||
| 2/15 | 4.38 | 0.6 | 3.84 | 0.5 | 3.63 | 0.4 | 2.75 | 0.75 | ||
| 2/22 | 4.40 | 0.5 | 3.85 | 0.5 | 3.65 | 0.4 | 2.75 | 0.75 | ||
| 3/1 | 4.43 | 0.5 | 3.90 | 0.5 | 3.62 | 0.4 | 2.75 | 0.81 | ||
| 3/8 | 4.46 | 0.5 | 3.94 | 0.5 | 3.63 | 0.4 | 2.75 | 0.83 | ||
| 3/15 | 4.44 | 0.5 | 3.90 | 0.5 | 3.67 | 0.4 | 2.75 | 0.77 | ||
| 3/22 | 4.45 | 0.5 | 3.91 | 0.5 | 3.68 | 0.4 | 2.75 | 0.77 | ||
| 3/29 | 4.44 | 0.5 | 3.90 | 0.5 | 3.66 | 0.4 | 2.76 | 0.78 | ||
| 4/5 | 4.40 | 0.5 | 3.87 | 0.4 | 3.62 | 0.4 | 2.76 | 0.78 | ||
| 4/12 | 4.42 | 0.4 | 3.87 | 0.4 | 3.61 | 0.3 | 2.75 | 0.81 | ||
| 4/19 | 4.47 | 0.5 | 3.94 | 0.4 | 3.67 | 0.3 | 2.76 | 0.80 | ||
| 4/26 | 4.58 | 0.5 | 4.02 | 0.4 | 3.74 | 0.3 | 2.76 | 0.84 | ||
| 5/3 | 4.55 | 0.5 | 4.03 | 0.4 | 3.69 | 0.3 | 2.76 | 0.86 | ||
| 5/10 | 4.55 | 0.5 | 4.01 | 0.4 | 3.77 | 0.3 | 2.76 | 0.78 | ||
| 5/17 | 4.61 | 0.4 | 4.08 | 0.4 | 3.82 | 0.3 | 2.77 | 0.79 | ||
| 5/24 | 4.66 | 0.4 | 4.15 | 0.4 | 3.87 | 0.3 | 2.77 | 0.79 | ||
| 5/31 | 4.56 | 0.4 | 4.06 | 0.4 | 3.80 | 0.3 | 2.77 | 0.76 | ||
| 6/7 | 4.54 | 0.5 | 4.01 | 0.4 | 3.74 | 0.4 | 2.77 | 0.80 | ||
| 6/14 | 4.62 | 0.4 | 4.07 | 0.4 | 3.83 | 0.3 | 2.77 | 0.79 | ||
| 6/21 | 4.57 | 0.5 | 4.04 | 0.4 | 3.83 | 0.3 | 2.77 | 0.74 | ||
| 6/28 | 4.55 | 0.5 | 4.04 | 0.5 | 3.87 | 0.3 | 2.77 | 0.68 | ||
| 7/5 | 4.52 | 0.5 | 3.99 | 0.4 | 3.74 | 0.3 | 2.77 | 0.78 | ||
| 7/12 | 4.53 | 0.4 | 4.02 | 0.4 | 3.86 | 0.3 | 2.76 | 0.67 | ||
| 7/19 | 4.52 | 0.4 | 4.00 | 0.4 | 3.87 | 0.3 | 2.76 | 0.65 | ||
| 7/26 | 4.54 | 0.5 | 4.02 | 0.4 | 3.87 | 0.4 | 2.76 | 0.67 | ||
| 8/2 | 4.60 | 0.4 | 4.08 | 0.4 | 3.93 | 0.2 | 2.76 | 0.67 | ||
| 8/9 | 4.59 | 0.5 | 4.05 | 0.5 | 3.90 | 0.3 | 2.77 | 0.69 | ||
| 8/16 | 4.53 | 0.5 | 4.01 | 0.5 | 3.87 | 0.4 | 2.75 | 0.66 | ||
| 8/23 | 4.51 | 0.5 | 3.98 | 0.5 | 3.82 | 0.3 | 2.75 | 0.69 | ||
| 8/30 | 4.52 | 0.5 | 3.97 | 0.5 | 3.85 | 0.3 | 2.77 | 0.67 | ||
| 9/6 | 4.54 | 0.5 | 3.99 | 0.4 | 3.93 | 0.3 | 2.77 | 0.61 | ||
| 9/13 | 4.60 | 0.5 | 4.06 | 0.5 | 3.93 | 0.3 | 2.77 | 0.67 | ||
| 9/20 | 4.65 | 0.5 | 4.11 | 0.5 | 3.92 | 0.4 | 2.76 | 0.73 | ||
| 9/27 | 4.72 | 0.5 | 4.16 | 0.5 | 3.97 | 0.3 | 2.76 | 0.75 | ||
| 10/4 | 4.71 | 0.4 | 4.15 | 0.4 | 4.01 | 0.3 | 2.76 | 0.70 | ||
| 10/11 | 4.90 | 0.5 | 4.29 | 0.5 | 4.07 | 0.3 | 2.77 | 0.83 | ||
| 10/18 | 4.85 | 0.5 | 4.26 | 0.4 | 4.10 | 0.3 | 2.77 | 0.75 | ||
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