The Cost of Waiting

Now is a good time to buy a house, but what if I wait until next year?

As a Buyer, whether you are a newbie or repeat, you not only have to be concerned about the listing price, but also about the “long term cost” of the property being considered. The cost of a house is influenced by many factors.

Two of these are the property’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home.

The rate at which these two factors can change is often referred to as “The Cost of Waiting”. If you decide to wait until next year to buy a home, prices for single-family homes are expected to rise by 5.3% by March 2017, according to CoreLogic’s latest Home Price Index.

(Source: http://www.corelogic.com/research/hpi/corelogic_hpi_march_2016.pdf)

Moreover, Freddie Mac’s most recent Economic and Housing Research predicts that the 30-year fixed mortgage rate will raise to 4.7% by this time next year as well.

(Source: http://www.freddiemac.com/finance/pdf/201604-Outlook-04%2022%2016.pdf)

What does this mean to buyers? If you are looking at a house priced at $300,000 in today’s market, here is a simple demonstration of what the difference in mortgage cost could be if you wait until next year to buy the same house:

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