Interest rates are still hovering near 30-year lows. But waiting to time the market is a dangerous – and losing – game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower. From 1971 to 2001 there were only 13 months where interest rates were below 7 percent. Currently rates have been fluctuating around 6 percent.
And home prices don’t necessarily move in unison with interest rates. So, if you decided to roll the dice and wait to purchase a home and the price were to actually drop $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up a half-a-point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.