National home prices have increased by 5.4% since this time last year. Over that same time period, interest rates have remained near historic lows which has allowed many buyers to enter the market and lock in low rates.
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 Insights Report, home prices will appreciate by 4.8% over the next 12 months.
What Does This Mean as a Buyer?
If home prices appreciate by 4.8% over the next twelve months as predicted by CoreLogic, Below 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 which represents the average home price nationally. Imagine what these numbers look like for homes priced above $600,000 which is more typical for our area.
If buying a home is in your plan for this year, doing it sooner rather than later will save you thousands of dollars over the terms of your loan. Curious what the numbers look like in our area? Set up a time to meet and we can look specifically where you want to buy!What If I Wait A Year to Buy a Home?