Purchasing a home is likely to be the largest purchase you will ever make. With mortgage terms of 15-30 years, many things will change during the time you are paying off your house. It is completely understandable that you want to be cautious, weigh all your options and make a prudent decision about your purchase.
It may surprise you to find out that waiting for the perfect situation is actually not the most financially prudent decision. In fact, waiting to purchase a home will cost you in numerous ways.
Home Prices Will Continue To Rise
Inflation is expected to continue in 2022 and home prices are expected to continue rising accordingly. Buying the same house a year from now could cost you as much as 7.4% more than today according to Fannie Mae projections.
Let’s take a look at an example. If the house you are considering today costs $350,000, waiting until next year to purchase an equivalent home would cost you $375,900.
Mortgage Rates Are Likely To Continue Rising
Mortgage interest is a crucial element in determining the cost of owning a home. 30-year fixed mortgages have been hovering around 3%. However, mortgage rates are expected to rise in 2022 with the Mortgage Bankers Association forecasting rates around 4%.
Using our previous example of a $350,000 home, your mortgage payment could rise $150-$200 per month based on next year’s projected rates. Over the course of your mortgage that means tens of thousands of dollars in extra costs.
The Choice Is Yours
It is ultimately up to you whether you buy a home and there is no right or wrong answer. But it is important to understand that, if you are fairly certain you will eventually purchase a home, there is a significant cost to waiting.
Our experienced team at Gail Rutkowski & Associates can help you whenever you are ready to get started.