Still Renting

How the Fed's Decision Impacts You

From the article: "So if you are wanting to buy a house, now could be the time to pull the trigger before rates rise even further. "

BS.

The people competing to buy your home are not buying a price. They are buying a monthly payment. As a buyer I want interest rates as high as possible for several reasons:

1. It means that, all things equal, the price will have to be lowered to keep the monthly payment "doable" for potential buyers.
2. Interest is tax deductible while the price is not. I get a bigger tax deduction with the exact same payment.
3. If I buy when interest rates are high, there is strong probability that I can refinance at a lower rate somewhere down the road.

Meanwhile, if you want to know what happens if you buy at a low interest rate, just look at the current foreclosure figures.

Of course, if I were a seller, I would want interest rates low, for the same reason a car dealership wants rates low. It brings buyers out of the woodwork, allowing you to up your price and get maximum value from your inventory.

In a nutshell: Buyers should want interest rates high and sellers should want interest rates low.

I figure in two to five years interest rates will be back up and prices will be in the tank. It will then be time to buy.