“Should I wait to buy?” is perhaps the question you are asking yourself today. Maybe you see an opportunity to purchase a new home now, but are unsure about the timing. Well, consider the following information:
2 Factors Influence The Cost
- A home’s appreciation over time
- The interest rate that a buyer must pay to purchase a home
These are the two factors that influence the cost of a home. Because these two factors are not static unchanging things, their rate of change is called the The Cost of Waiting.
Does Waiting Make Sense?
Well, a recent national survey of economists, real estate experts, and investment strategists indicated that home values will appreciate by 4% in 2015 (first influence of cost).
Freddie Mac predicts a 4.5% appreciation in the 30-year mortgage rate by the end of 2015 (second influence of cost).
Meaning what exactly?
Today, a $250,000 mortgage at an interest rate of 3.66% would mean a payment of $1,145.06. In the fourth quarter of 2015 though, the payment increases to $1,317.38 as interest rates and appreciation increases.
So the cost-of-waiting increases by $172.32 in 2015 in this scenario.
Meaning what exactly, again?
Meaning it probably doesn’t make sense to buy later.
