Brief Blip of False Bottom Buyers Bites the Dust

As a prospective RE buyer, for me, even low rates are not enough of an incentive to buy right now, as it seems that values are still coming down. I would rather wait until housing prices have bottomed, even if it means that financing costs are higher. If the monthly cost is roughly the same in either case (high value, low finance cost vs. low value high finance cost), I would prefer a lower house... [more]

As a prospective RE buyer, for me, even low rates are not enough of an incentive to buy right now, as it seems that values are still coming down. I would rather wait until housing prices have bottomed, even if it means that financing costs are higher. If the monthly cost is roughly the same in either case (high value, low finance cost vs. low value high finance cost), I would prefer a lower house price and higher financing costs because a) I don’t want to be upside down in six months on the value of my home, and b) because the interest payment is tax deductible but not the principle- I’d rather pay more in interest than in principle. I imagine may others feel the same way I do. Add in economic insecurity, high and going higher taxes and maintenance, high down payment requirements, scarce mortgages and the negative equity most owners are sitting on and you have a prescription for paralysis. The market freezes and it will be sellers who eventually blink and start dumping units at firesale prices. That includes developers sitting on bloat. [less]