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What If I Wait A Year to Buy a Home?

By in Buyers with 0 Comments

In the Tri-Cities, the median home sales price has increased between 7-10 percent over the past year. Meanwhile, over that same time period, interest rates have remained near historic lows. Together, this has let a lot of buyers enter the market and lock in low rates.

If you’re selling your home, you’ll probably be most concerned about short-term price — i.e., where home values are headed over the next six months. As a buyer, though, you should be more concerned about the long-term cost of the home rather than the short-term price.

The long-term cost of a home is impacted significantly by your mortgage. The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all forecast that mortgage interest rates will increase by this time next year.

What Does This Mean as a Buyer?

According to CoreLogic’s most recent Home Price Insights Report, home prices will appreciate by 4.8 percent over the next year. If that happens, here’s a simple demonstration of the impact that an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today:

Final Thoughts

As you can see above, a change of 0.5 percent in interest rates can add almost $150 per month to your payment on a $250,000 home. And when you look at it over 30 years, we’re talking more than $50,000 extra out of your pockets because you bought after interest rates went up. If you’re buying a more expensive home, all of those numbers go up, too.

If buying a home is in your plan, doing it sooner rather than later could save you tens of thousands of dollars over the terms of your loan.

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About The Author
Cari McGee

My husband and I came to the Tri-Cities in 1994, and we thought it would be a temporary stop on our way to larger cities. He was a television sports anchor at the time, and we planned to go wherever the "next step up" took us. Twenty-plus years later, we're still here and we've loved every minute of it! We have two children now, and we've found the Tri-Cities area is a wonderful place to raise a family. It's a great place to do outdoorsy things -- I like to hike Badger Mountain or run along the river path. I also love reading ... by a cozy fire in the winter or a beautiful picture window in the summer (with the A/C on!). I've been a licensed Realtor since 2004. I earned my managing broker's license in 2016, which means I can run my own brokerage, or create a team of real estate agents and supervise them, which is exactly what I did when I formed the Cari McGee Real Estate Team in 2018! We have administrative and marketing personnel, as well as additional agents to serve you. I became a director of the Tri-Cities Association of Realtors Board of Directors in 2016, became Secretary/Treasurer of the organization, and was elected to Vice President in 2019. Want to talk about real estate? Click here to schedule a meeting with me!

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