More money has been lost to indecision than was ever lost to making
the wrong decision. The economy and the housing market have caused some
people to take a “wait and see” position that could cost them in lost
opportunities as well as almost certain higher costs in the future.
To illustrate what the opportunity cost might be, let’s compare what
the value of the down payment two years from now would be if it was
invested in a certificate of deposit, the stock market or used to
purchase a home today.
A 3.5% down payment on a $175,000 home is $6,125.00. If it was
invested in a CD that would earn 2%, a person would have $6,372 in two
years. The earnings would be taxed as ordinary income tax rates. It
wouldn’t earn much but it would be safe and secure.
The same amount would grow to $7,013 in the stock market if you
picked the right stock or fund and it yielded 7%. The earnings would be
taxed at the long term capital gains rate. The return could be greater
but so is the risk involved.
If this person were to purchase a home today that appreciated 2% in
value over the next two years, the equity in the home would grow to
$18,769 due to value going up and the unpaid balance going down.
Source: http://www.newhopehomesforsale.org/indecision-costs