Homeowners who recently obtained Colorado mortgages to earn federal homebuyer tax credit may have been better off waiting.  According to a recent article by The Denver Post, those who rushed to get now-expired tax credits might have acted a little too soon. Despite the lowest interest rates in over 60 years, home sales and prices are still plummeting, and some experts say it would have been more beneficial for some to just wait before financing a Colorado home.

According to the National Association of Realtors, home re-sales dropped by 27.2% from June to July. A buyer looking to take out a $240,000 mortgage today at a 4.42 % interest rate could save $33,287 in interest costs over a 30 year span, which is four times the $8,000 credit used by a first-time homebuyer who financed at 5.21% earlier this year.

Many rushed to buy earlier this year before the knowledge was available that rates would drop, so timing is a huge factor of why many missed the savings. Studies in behavioral finance support the idea that people will go for an upfront payout rather than a spread over a long period that is worth more. Just look at lottery winners.

A recent Zillow.com survey also found that a third of homeowners believe housing prices in their area will continue to decline. If prices are headed lower, the rational thing to do is to wait for the better bargain. But such expectations can become self-reinforcing, especially to a desperate seller.

When the real-estate economy was booming, many people purchased homes with the notion that prices would continue to rise. Currently, it is just the opposite, with prices continuing to drop, many can’t buy unless they sell, and are not willing to do so for thousands less than their original purchase price.

While hindsight is always 20/20, it’s wise to speak with an experienced Colorado home loan expert who can explain the best times to buy, sell or re-finance. Buying and selling home are some of the most important decisions we make as adults so make sure you’ve done the research and aren’t just reacting to a perpetually volatile market.