Is Now the Time to Buy or Should You Wait? Let’s Look at the Numbers
If you’ve been considering purchasing a home, you might be wondering if now is the right time to take the plunge or if waiting for the market to change could save you money in the long run. Let’s break down the numbers and see what the potential costs look like for both options.
Scenario 1: Buying Now
Let’s assume you purchase a home today for $350,000. With a 20% down payment and a 30-year mortgage at a 7% interest rate, here’s how the numbers would break down:
Loan Amount: $280,000
Down Payment: $70,000
Principal & Interest Payment: $1,863 per month
Scenario 2: Waiting for a 6% Interest Rate and Home Value Increase
What if you decide to wait and the market plays out as it has historically? Home values have generally increased by about 5% per year, so let’s factor that into the equation. If home values rise by 5% and interest rates drop to 6%, here’s what the numbers would look like in a year:
New Purchase Price: $367,500 (5% increase from $350,000)
Loan Amount: $294,000
Down Payment: $73,500 (this includes an extra $3,500 due to the price increase)
Principal & Interest Payment: $1,763 per month (a slight decrease compared to the current payment)
So, what do these numbers mean for you?
Buying Now: You secure a home at today’s price of $350,000 with a monthly payment of $1,863, locking in the current interest rate.
Waiting: You’ll pay a slightly lower monthly payment of $1,763, but the home price will have risen by $17,500, and you’ll be paying a higher loan amount ($294,000). Plus, you’ll be competing with other buyers who are also waiting for the lower interest rate, potentially driving up demand and prices.
The Bottom Line:
While waiting for a 6% interest rate might seem appealing, you could be paying more in the long run due to rising home prices and increased competition. By buying now, you lock in today’s prices and get a more predictable mortgage payment, even though interest rates are higher.
If you’re ready to make a move and secure your dream home before prices rise even further, now might be the time. Contact Gwen Fowler at 864-710-4518 (text or call) or visit www.coolmountainescapes.com to discuss your options and start your homebuying journey!
Ready to take the next step? Let’s talk about finding the perfect home for you.
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