I agree with everyone above. Forget interest rates. Monthly payments, relative to income, are near historic highs. Higher interest rates do NOT mean higher monthly payments. The idiots who claim this consistently “forget” to note that prices will come down to balance the higher rates, especially when we are *entering* what is likely to be a severe recession. People cannot afford their current monthly payments, which is why we’re seeing all the foreclosures right now.
Buy when prices are low, rates are high, and monthly payments are near lows, relative to income.
Lower rates and loose lending go hand-in-hand. That’s when the buyer pool is large, and more people are willing to stretch their monthly budget to beat out other buyers.
Higher rates mean we’re probably seeing tighter lending standards (less money to lend / money is more valuable). The buyer pool will be smaller, with fewer people competing to buy, likely leading to lower monthly payments. These more qualified buyers will also be more thrifty and value their own money more, so they will not want to stretch their budgets.
The idea that you can always refi to a lower rate is true ONLY IF rates go down during the term of your loan. That may or may not happen. Doesn’t matter, because you have a lower price which can be paid off earlier; higher rate, so more can be written off on taxes; and when you buy low, it’s more likely you’ll see appreciation — in case you have to/want to sell before your mortgage is paid off.
