An article in Newsweek titled If You Don’t Buy a House Now, You’re Stupid or Broke reminded me of a blog post I wrote in June 2008 titled Should I Wait for Honolulu Home Prices to Drop?

The main point of both articles is this:  interest rates may have a greater impact on what you ultimately pay for a home in the long run than small changes in the initial purchase price.  Put another way, a .50% rise in interest rates costs you more than the $10 or $20 thousand you might save by waiting to purchase your home.  Also, don’t forget to factor in the potential loss of the tax credit offered by the government.

Looking at it from the buyer’s affordability perspective, a trusted Honolulu mortgage advisor wrote, “if rates go up by .50%, [the buyer] can afford a property that is 5% lower in price.”

Each individual home buyer’s situation is different and he/she must decide what is best for him/her.  If you’d like a free consultation or referral to a great mortgage professional, please contact Michael Zimmerman.

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