How Much Will Waiting to Buy a Home Cost You?
Waiting to buy a home is going to cost you. How much? That’s what I’m going over today.
If you’re on the fence about buying a home and thinking that you might wait until a year or two down the road, you should know that it’s going to cost you quite a bit of money. Here’s why.
If you’re not already aware, we are in a severe seller’s market. Home prices keep going up and the limited inventory has left buyers with few choices. It might seem like a good idea to wait it out until the market gets better and inventory isn’t so constricted.
In reality, no matter what the market does, it’s going to cost you to wait. We’ve been saying the same thing for the last three years, and the message still rings true today. Home prices are going up 4% to 5% every year without fail. They went up 4.7% last year. If you would have bought a home three years ago, you would have seen a total of 13.7% appreciation by now.
Let’s say you’re looking to buy a $1 million home. Waiting three years could cost you an extra $130,000 or more. We predict home prices to go up between 4% and 5% in 2018. If you wait another year, expect to pay an extra 5% for your home.
In addition to appreciation, interest rates are another key influence on the market. We’ve been hearing that they’re going to increase for a long time now. Currently, rates are in the low 4% range and are creeping up. Keep in mind that for every 1% increase in interest rates, 10% of your buying power goes away. They might not go up a full 1% this year, but expect at least a 0.5% increase.
If I was a homebuyer and I wanted to get in a home in the next few years, I would do it now. Waiting is just going to make things more expensive. Even in a tight market, we can help you find the home you want.
If you have any questions or need help buying to selling a home in this market, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.