Is now the Right time to Buy?

Everyone is asking, "is the now the right time to buy?" Only a crystal ball can give you the definite "yes or no" that you're looking for. You can elimimate some of the uncertainty with a understanding of the financial markets and how they affect affordability.

For those folks waiting for the perfect opportunity to buy this might be it. Interest rates will go up once thefinancial systems stabilize. They have to, it's called inflation. Due to the massive amounts of money being printed, inflation is inevitable. Once the dollar weakens, due to inflation, we'll have less purchasing power.

While prices may continue to decline, with higher interest rates you'll be able to afford less. Let's look at an example.

• Loan Amount: $200K
• Interest Rate: 5%
• monthly payments $1,073.64

vs.

• Loan Amount: $200K
• Interest Rate: 7%
• monthly payments $1,330.60

vs.

• Loan Amount: $200K
• Interest Rate: 10%
• monthly payments $1,755.14

So, as you can see whether prices continue to fall or not, affordability is often dictated by interest rates. In my opinion, this is part of the reason for the bubble. Because interest rates were offered at low, low introductory rates folks could afford more...until their interest rates went up.

Let's look at the "no" side of the question...no this is not a good time to buy. With the financial markets in it's weak state, interest rates could stay low for a while...while prices continue to decline, creating even more affordability.

Whether you're looking to buy now or wait if out for a while, it all comes down to your motivation. If you can afford the home you want now, buy. If you can't, continue to wait. Either way, you're right. If you're waiting for the bottom, make an educated decision by knowing the facts.