The Danger of Waiting to Buy Real Estate
Before you put your plans to buy on hold, you should remember that we are still enjoying historically low interest rates. 5 year fixed rates at 3.09% ... Variable rates at 2.65%!!
A $400k mortgage will carry for $1912 per month based on today's 3.09% 5-yr fixed rate. Do you want to wait for house prices to fall and save some money?
Well, if mortgages rates go to more normal levels, say 5% interest rates that same $400k mortgage will cost you $2326 per month; a $360k mortgage at 5% will cost you $2094/per month. That's still $182 per month more that you would pay today ... and you may have lost 1, 2, 3 or more years of not paying a mortgage down.
In most real estate it may make more sense to buy, hold and enjoy, than it does to not buy and rent. With interest rates at record lows, it's even easier to make that call.