The only thing the "Experts" can all agree on, when it comes to housing prices (and interest rates), is that NOBODY can predict the immediate future but they will eventually go up. You see, nobody really knows how low interest rates or prices will go, or when they will start upwards again. All that is known for sure is that Interest rates are at their lowest point in several decades (with little room to fall much further)... and housing prices, at least in Texas, weren't ever skyrocketing (they're some of the most affordable in the nation) and our local economy is still strong, so our prices have been mostly flat and there is no reason to expect them to tumble. So, the important question is, what are you waiting for? Prices and interest rates are very low (and you're supposed to "Buy Low" so that one day you can "Sell High", right?). The biggest mistake most people make in situations like this (whether the housing market or the stock market) is waiting for the "bottom" before they buy. Unfortunately, the only time the bottom can be clearly identified is after things have started upwards again (i.e. interest rates, housing prices, the stock market). At that point, much of the savings have been missed... this is when people mistakenly "Buy High". Keep these 30-year (fixed) Principal and Interest (P&I)* mortgage payments in mind each time you catch yourself thinking that you might should wait to see if we've "hit bottom" for prices and/or interest rates:

• You buy a $200,000 home at 5.5% and your monthly P&I payment is just $1,135.58
• If prices remain stable, but interest rates rise just 1%, that same $200,000 home (at 6.5%) is $1,264.14 (the same home costs you $128.56 more per month).
• If prices take a BIG tumble (for Texas) and fall 5%, but interest rates remain stable, the house is $190,000, which, at 5.5% is $1,078.80 (the $10,000 savings only saves you $56.78 per month).
• Worst case, you wait 'till you're 100% sure that interest rates and prices had hit bottom before you buy (remember, the world only knows they had bottomed out because they're going up again) and so you jump on the home for $210,000 at 6.5% and your monthly P&I payment is $1,327.34. The same home costs you almost $200 more per month!

So, the moral of the story is: Housing is on sale right now! Both pricing and mortgage interest rates are LOW and are expected to increase again (and remember, it's "Buy Low, Sell High"). Could this sale get slightly better? Perhaps... but experts agree that the sale will certainly come to an end, so don't wait until it's all over to go shopping or you'll simply get much less for your money. And ultimately, who cares if a sale gets "slightly" better, as long as you get in before the sale goes away... that's when housing prices have rebounded and interest rates are on the rise. Then you'll be sitting pretty in a home with rising equity and a low interest mortgage. Heck, you might be able to get EVEN MORE when you sell if your low interest mortgage is assumable**... but that's another article entirely.

*Note that P&I payments don't include property taxes or homeowners insurance. Your total house payment is known by the initials PITI (principal, interest, taxes and insurance). Two of those items are tax deductible and will usually save you some money on your income taxes... do you know which ones or what the decuctions mean for your wallet? Call or email me for details.
**Note that FHA loans are still assumable, but the buyer has to qualify. Call or email me for details.

Ryan Cave, The "Caveman"
Truth, Honor & Personal Integrity
214-789-9366
www.CaveRealty.com