Have you been delaying your home purchase and still waiting on the house market crash? How long has it been since you made that decision to wait?
If you've been honing that waiting muscle, have you considered the financial impact it brings?
Interest rates are still climbing. Rates went up more than 2% within 4 months this year and it's not an isolated case. Are you renting while you wait to purchase? Have you considered that renting is paying your landlord's mortgage and building wealth for your landlord? Have house prices and interest rates increased while you wait?
Along with the mortgage rates increasing, home prices have been going up as well. For example in July 2020, the median home price was $432,000. A year later, the median home price was $530,000. That is almost $100,000 or a 22% increase! What if by July 2022, the house price appreciated by 10% more which leads us to an estimated home median price of $583,000? The ripple effect is a rise in the monthly payment from $1,805.47 to $2,551.66, and in the cash to close a change from $91,407.68 to $121,607.68.
A "waiting type" homebuyer spends an additional $30,000 for his purchasing power for down-payment wherein that could have been an equity increase savings within a year. Additional savings in the interest expense could also have been made when the decision to purchase was chosen rather than being in the waiting bubble for several months or years. Financial experts share their common opinions as well on the cost of waiting.
"You might wait till next year, but you're going to definitely pay more, in my opinion. You'll pay more to borrow your money. Your expenses are really going to ratchet up," Shark Tank star and finance expert Barbara Corcoran warned. 1
"The factors driving up prices aren't likely to subside anytime soon. I don't think buyers should be betting on any really significant price declines. If anything, as interest rates move higher, the cost of buying a home is going to go up," says Robert Dietz, chief economist at the National Association of Home Builders. 2
Considering all these financial impacts and opinions, it is highly imperative to make the decision of purchasing now, locking in the mortgage rates, and getting that dream home when you have the funds and qualifications ready.
1 USATODAY.com - Should home buyers wait for price to fall
2 Time.com - Don't wait to buy a home
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