Whether you are a first time or move up buyer, waiting until next year to buy your home will cost you.
The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
National home prices have increased by 6.7% year over year. Accordingly CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.
While interest have remained low they have also increased. Mortgage lending giants Freddie Mac and Fannie Mae both project that mortgage rates will increase even more by this time next year.
What Does This Mean For A Home Buyer?
If home prices appreciate by 5.2% over the next year as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the sales price and mortgage payment of a home selling for $250,000 today*:
As more homes are sold, supply decreases, causing prices to rise even further. So, if you’ve been thinking about buying a home, don’t lose your confidence, but it may be prudent to act quickly. If your one of those people thinking that with rates increasing then there will be less buyers and homes will decrease think again. History clearly shows that as the economy starts to heat up, and unemployment goes down, wages start to go up, people can pay more for houses. As a result up all these factors the market tends to reach what the market will bear, and you can anticipate that home prices will continue to increase.
There are many studies that show there is a clear relation between employment rates and home ownership. When the economy is doing well people buy when there are no jobs there is no money to buy.
Bottom Line
With these numbers, waiting until next year to buy could cost you thousands of dollars a year for the life of your mortgage! If you’re on the fence about buying a home or are waiting to buy a home until next year, the house you can afford today could be out of reach next year due to increasing home prices and interest rates.
Good News, if your thinking of buying there are many down payment assistance programs available. To learn more about or to see what down payment assistance programs you may qualify for call us at 678-820-6642 or Click Here To Get Your Home Loan Pre-approved online or Call 678-820-6642
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