Last week we discussed how national home prices have increased by 6.7%. Additionally, interest rates have remained historically low which has allowed for more buyers to enter the market. The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year.
What Does This Mean as a Buyer?
While sellers are generally more concerned about ‘short-term price’, buyers must be more concerned with the ‘long-term costs’ of a home. The difference is between where home values are headed over the next six month vs. the long-term expense of a property.
If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:
If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan. Contact us today for a FREE consultation!