1. Why am I buying a home in the first place?This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money. For example, a survey by Braun showed that over 75% of parents say, “their child’s education is an important part of the search for a new home.” This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. They are:
- A good place to raise children and for them to get a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
2. Where are home values headed?According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in May (the latest data available) was $252,800, which is up 5.8% from last year. This increase also marks the 63rd consecutive month with year-over-year gains. If we look at home prices year over year, CoreLogic is forecasting an increase of 5.3% over the next twelve months. In other words, a home that costs you $250,000 today will cost you an additional $13,250 if you wait until next year to buy it.
What does that mean to you?Simply put, with prices increasing each month, it might cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.
3. Where are mortgage interest rates headed?A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates. The Mortgage Bankers Association (MBA), NAR, and Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:
Bottom LineOnly you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.
Do You Know the Cost of Waiting? Do You Know the Cost of Waiting? [INFOGRAPHIC] I am really not a fan of scare tactics. I am not a sales guy who thinks Always Be Closing is even acceptable. Providing useful information that is accurate and timely is all that you should expect from your Realtor®. Working with a Realtor® is agreeing with the words, “Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization.” Pretty great stuff, right?
Do You Know the Cost of Waiting? [INFOGRAPHIC]
It goes on to read, “Realtors® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.” Wow, I gotta say that is a good Preamble.
I believe in these things. I know place is important. I know community is built by individuals who come together to create the community. I know that providing insight and information freely will help all of us. Looking at this infographic it is clear that the facts prove now is a very good time to both buy and sell your home.
- The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
- Freddie Mac predicts that interest rates will increase to 4.8% by this time next year, while home prices are predicted to appreciate by 4.9% according to CoreLogic.
- Waiting until next year to buy could cost you thousands of dollars a year for the life of your mortgage!
- Do You Know the Cost of Waiting? [INFOGRAPHIC], Do You Know the Cost of Waiting?
"Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years. Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home."