Has Maryland's real estate market hit bottom?

If you’re interested in buying a home in Maryland, then without doubt you have been wondering if the time is right to finally pull the trigger. Most experts agree that Maryland’s housing market has indeed hit bottom and, according to this article on somd.com, is beginning to climb. Yet many potential buyers aren’t certain. “Has the market really hit bottom or should I wait a little longer?” It’s a common question these days, but not necessarily the correct one. With interest rates at a 40-year low, (hovering around the 5% mark) a more important question may be, “How much longer will interest rates remain this low?” That’s because every ¼ percent increase in your rate adds $6,000 per $100,000 financed for a 30-year fixed mortgage over the life of the loan.

So assume you are looking at a house whose current price has fallen to $425k and the current interest rate is 5.00%. If the rate jumps to 5.25%, you will add over $25,000 in interest. Consequently, even if the gamble works and the homeowner dramatically lowers his price to $400,000, you still lose. Is it really worth waiting to see if home prices fall a few thousand dollars more in lieu of locking into a fantastic rate? One thing is certain--rates are going to climb. The question you have to ask yourself is, “Do I feel lucky?”