For those sitting on the fence about whether to make the "buy" decison or not, or for those afflicted with "paralysis by analysis" and are looking at every property on the market and thus cannot make a decision, consider this:
If interest rates rise from today's lows to an entirely plausible 7.5%, sale prices would have to drop at least an additional 20% - a whole lot less plausible - to make up the difference in monthly payments.
Interested in my opinion?
History will show that, as of December, 2009:
Interest rates had bottomed out, and had no where to go but up.
Interest rates began to rise sooner rather than later; with the large deficits and massive increases in the national debt and the money supply, interest rate increases were unavoidable. We all know that it is all connected.
Real estate prices were at or near the bottom (varied by market, geographically and by class of property.)
Even if real estate prices continued to decline, rising interest rates wiped out any consumer "gain", and housing affordability began to decrease.
2009 and 2010 were the best housing markets for buyers in many years.
The idea of rising interest rates may sound grim, but I don't mean it to be. All this shall pass, and maybe sooner than any of us believe. My intention is merely to draw attention to the matter and to give buyers one more reason to conclude that buying now is in their best interest.