What is the Cost of Waiting to Buy?

Today we are going to discuss how waiting to buy at the end of 2018 rather than now can cost you thousands.

First, let’s not forget that if you are looking to buy a home, click on the search all properties link. Or, if you are looking sell your home click on the value link and we will send you a free home valuation. Now on to our topic.

Over the course of the last 12 months, home prices have appreciated by 7.0% around the nation.  In the McAllen-Edinburg-Mission MSA the median price has gone up about 5.9% over the last year and even higher in neighboring towns.  During that same period, interest rates have remained historically low which has allowed many buyers to enter the market.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 4.7% over the next 12 months.

What Does This Mean as a Buyer?  If home prices appreciate by 4.7% over the next twelve months, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

By waiting, someone at this price point would be paying an roughly an additional $162 per month, $1,952 per year and $58,564 over 30 years.  So bottom line, if you buying a home is in your plan for 2018, doing it sooner rather than later could save you thousands over the term of the loan.

If you are ready to take the next step and want help finding your dream home call us today at 956-203-0044.  We have an expert advisor ready to assist you with your home buying needs.  We look forward to hearing from you.