This is a common misconceptions that lower prices and higher rates leading to equal monthly payments are essentially the same thing. They are not. I wrote a lengthy post about this topic on my blog.

I see what you’re saying but I think there are many other factors.. I personally think that the best deals may be panic sells early in this cycle… where people just want to protect the equity they already have… I’m trying to buy a house off a bank though, so that may be unlikely..

I’m looking for a place to live.. If I wait another 12 months, thats another $20,000 in rent.. Shouldn’t that be included in your calculations? If you’re comparing 2 scenarios involving time, I think rent should be included.. because both people or scenarios require some place to live or stay while the prices come down and interest rates go up.. IMO, it’s more significant than the opportunity cost you mentioned.