- The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
- Freddie Mac predicts that interest rates will increase to 4.8% by this time next year, while home prices are predicted to appreciate by 4.9% according to CoreLogic.
- Waiting until next year to buy could cost you thousands of dollars a year for the life of your mortgage!
Over the next five years, home prices are expected
to appreciate 3.22% per year on average and to grow by 17.3% cumulatively, according to
most recent Home Price Expectation Survey.
So, what does this mean for homeowners and their equity position?
As an example, let’s assume a young couple purchased and closed on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?
Since the experts predict that home prices will increase by 4.4% this year alone, the young homeowners will have gained $11,000 in equity in just one year.
Over a five-year period, their equity will increase by nearly $43,000!
This figure does not even take into account
their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.
If that was not incentive enough check out our related article The Reason Many Millennials are buying now
to see what other great opportunities are driving people to buy.
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