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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:

mortgage rates house payments

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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Cari McGee

Hi, I'm Cari McGee. 👋 I've lived in the Tri-Cities since 1994 and I've been a licensed Realtor® since 2004. That's a lot of local knowledge and real estate experience that I put into every article you read on my website! We've helped more than 560 families buy or sell property in the Tri-Cities. In 2023, our community voted us the bronze winner for Best Real Estate Team in the Tri-Cities Best voting. Learn more about me by clicking the link right above. And if you have any questions, get in touch anytime!

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