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Waiting to buy a home could hurt your buying power – Lancaster City Pa – Alex Reedy

Often people ask me when do you think I should buy? When will homes be at their lowest value or when will they bottom out? The short answer to this lays in the other side of the equation. No one has a crystal ball, and real estate is very difficult to predict.

If a home buyer waits on home values to go lower, they may be successful. They also may have their buying power crippled by interest rates going up. This is the other side to the equation, interest rates. For example:

$200,000 (Home Value) x .06% (Interest rate) = $12,000 / 12 = $1000 per month (principal and interest only)

Now if you decide to wait, lets say that home value goes down to $185,000 but, rates go up to .08%:

$185,000 ( Lower Home Value)  x .08% ( Higher Interest rate) = $14,800 / 12 = $1233 per month (principal and interest only)

See what I mean, if you ever want to talk about Lancaster County Real Estate, 717-538-3910 is my cell.

Alex Reedy