I speak to a lot of real estate agents that have issues with buyers waiting to buy. Obviously, we know the prices consistently go up over the years even if there are drops here or there but what is really the difference if you buy now versus waiting until next year?
The National Association of Realtors and Mortgage Bankers Association came up with a prediction on how much homes are now versus what they will be next year at the same time. The National Association of Realtors predicts a 3% increase in home prices and the Mortgage Bankers Association predicted a .40% in interest rates. So what does that look like?
Let’s take a $600,000 house, if you wait until next year that home will be $618,000.
If your interest rate is currently 3.75% or 5.019% APR, next year that will be 4.150% or 5.233% APR.
That comes out to a monthly mortgage payment now of about $2778.69 versus next year which it will be $3004.12.
So what’s the savings by buying now? It will cost you $261.28 more monthly or $3135.36 annually and over seven years cost you over $22,406 more than if you bought now.