You can certainly wait to buy a home. There are a few compelling reasons to do it now. The ones we think are the most important are the following: 1) Mortgage rates are going to rise; 2) Prices will rise; and 3) You pay a mortgage either way.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Index* reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey* shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost three-quarters of a percentage point by this time next year. An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way You are Paying a Mortgage
A recent paper from the Joint Center for Housing Studies at Harvard University* explains it well: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
There are certainly a lot of great reasons to wait to buy a home. However, homes will continue to appreciate, rates will increase and you are paying for housing anyway. These are three compelling reasons to consider buying now.
Highly recommend Barry Pearson!
Barry was fantastic to work with! Very informative and reliable. Any questions or concerns we had, he handled immediately. Made our purchase experience as stress free as possible. He even got our loan closed early!! Highly recommend him!