Last Updated on April 9, 2024
In the dynamic world of real estate, timing is everything.
As trusted advisors to homebuyers, we understand the significance of making informed decisions in a market that’s as unpredictable as it is promising. Today, we’re here to shed light on a crucial aspect often overlooked: the cost of waiting to buy a home.
It’s no secret that home values tend to climb steadily over time. While market fluctuations may occur, the overall trajectory points upward. In the current market trend, home values rose by a remarkable 6.80% last year, surpassing the long-term average of 4.58%.
However, many homebuyers fixate on mortgage rates. Understandably, they wait for rates to decrease, hoping for a better deal. But here’s the catch: waiting might not always work in their favor.
Consider this scenario: you postpone your home purchase, anticipating a drop in mortgage rates. Meanwhile, home values continue to rise. When you’re finally ready to make a move, you find yourself paying significantly more for the same property you could have purchased earlier. Let’s calculate the new monthly mortgage payment for a $200,000 loan if you wait one year to buy.
- We’ll assume that the home appreciates by 6.80% during that year, and the interest rate does not change.
- The new home price after one year of appreciation is $213,600
- The borrower would pay approximately $66.15 more per month by waiting one year to buy.
- So, by waiting one year to buy, the borrower would pay approximately $23,814 more over the life of the loan than by buying now.
While buying a house right now might feel overwhelming, the cost of waiting can be a burden on finances down the road. If now’s the time to buy, connect with a Realtor or mortgage professional today.
