I’ve been getting this question a lot: “Should I buy a home now or should I wait until next year?” Here are a few statistics that may help you make your decision if you’re unsure.
Interest rates are sitting right at about 3.83%, according to Fannie Mae and Freddie Mac. However, they are expected to go up to 4.4% in the next year. Let’s say the home you’re interested in is listed at $250,000. If interest rates were to go up to 4.4%, that would increase your monthly mortgage payment from $1,169.17 to $1,314.50.
What do those costs add up to over time? Well, an extra $145.33 per month will eventually equal $1,743.16 per year and an incredible $52,319 over the 30-year term of a typical mortgage.
The home you’re looking at now is going to be listed for a higher price as well. With a modest 5% appreciation, a home with a list price of $250,000 this year will have a list price near $262,500 next year.
That’s a lot of money that you’re basically giving to somebody else if you’re choosing to rent and waiting to buy. If you’re ready, willing, and able to buy now, you should probably get in the market while rates are low and the market is healthy. If you wait, it’s certainly going to cost you.
If you have any questions about buying a home or anything else relating to real estate, give me a call or send me an email. I look forward to hearing from you.