June 15th, 2021
Many are wondering if now is the best time to buy a house or if waiting is the answer. Renters are thinking about purchasing a home instead of renting and some homeowners are realizing their current home is no longer meeting their needs. Questions such as “will home values be higher a year from now?” and “will mortgage rates be higher a year from now?” are frequently being asked.
Here is what we know:
Where will home prices be a year from now?
Recent projections have shown that prices will likely increase by 7.7%. Let’s look at an example:
If the buyer makes a 10% down payment ($32,500), they’ll end up borrowing $292,500 for their mortgage. Applying the projected rate of home price appreciation, that same house will cost $350,025 next year. With a 10% down payment ($35,003), they’d then have to borrow $315,022.
Therefore, as a result of rising home prices alone, a prospective buyer will have to put down an additional $2,503 and borrow an additional $22,523 just for waiting a year to make their move.
Where will mortgage rates be a year from now?
Currently, mortgage rates are around 3%, however, experts believe that they will rise as the economy continues to change.
Take a look at the forecasts for quarter 1 of 2022 from four major entities:
Freddie Mac – 3.5%
Fannie Mae – 3.5%
National Association of Realtors – 3.5%
Mortgage Bankers Association – 3.9%
The average of these four projections is 3.6%, which is an increase from what we are currently seeing today.
So what does this mean?
By waiting to buy a home you could be paying much more in the long run. If you are in the market to purchase a home, do not wait! Our team would love to connect with you and help you through this process.
Source: Keeping Current Matters