Procrastination Has a Price
With the real estate market continuing to recover gradually there are still people who are set in waiting until the perfect moment to buy a home. I think the perfect time to buy is now and let me take a moment to show you why I say that.
The average sales price for a home in DuPage County at the end of January 2013 was $235,151 and one year later the average sales price was $268,499 a 14.2% increase. Now where these stats should really open a persons eyes is in the monthly payments.
If a person bought a home in DuPage County at the end of January 2013 for $235,151 and put 10% down, with an interest rate of 3.50%, their payments should have been somewhere in the ballpark of $1048.32 with $97.98 of that being mortgage insurance.
Now let's say that same person decided to wait a year to buy that same kind of home at the end of January 2014. The new price would be $268,499 and our buyer would have had to come up with an additional $3335 for the 10% down payment. The mortgage insurance would jump up from $97.98 a month to $111.87 and the interest rate would have been in the neighborhood of 4.5% leaving the buyer with a mortgage payment of $1336.28.
The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are projecting the mortgage rate to be in the vicinity of 5.25% at this time next year. With the home values steadily rising along with the interest rates, waiting can be pretty costly but exactly how costly?
How about $122,570 extra for that perfect home. In 2012 the total amount of interest to be paid out on our $235,151 home would have be $130,486. 49. The amount of total interest paid for the same home in 2013 at the purchase price of $268,499 would be $199,135 and at this time next year with a modest 6% increase in value and a projected 5.25% interest rate, our home should cost $284,608 with the total amount of interest being paid at $253,056. I don't know about you but I think that could pay for a lot of corned beef and cabbage.
If you have any questions about theses statistics or any other real estate related matters I'm never to busy to answer your questions.