Nina Hollander, a REALTOR in North Carolina, researched and wrote this article that perfectly addresses the question of whether to buy now, or wait. What are your thoughts?
Lots of people seem to be asking the question ~ "Should I buy a home now or wait another year? And if I wait will it cost me more to buy?" What does the cost of waiting actually mean? 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.
What determines the cost of waiting to buy?
- If interest rates increase while you wait, you will pay more in monthly mortgage payments.
- If home prices rise while you wait, you will pay more for a home and increase your mortgage payments even if interest rates don't increase.
- If both home prices and interest rates increase, you will increase your mortgage carrying costs, assuming you even qualify for a more expensive home at a higher rate.
The infographic below clearly spells out the costs involved in waiting to buy a home if both home prices and interest rates increase in the next year. Interest rates have stayed at historic lows (especially post-BREXIT), but no one can guarantee they will stay this low indefinitely. Home prices have increased throughout 2015 and 2016 year-to-date and with the lack of inventory in many markets throughout the US, it's reasonable to assume that home prices will continue to increase. In Charlotte, North Carolina median and average home prices have increased 5.2% and 5.12% respectively on a year-to-date basis. It doesn't take much to start increasing your monthly mortgage payment.
So should you buy a home now or wait? Will it cost you more to wait? The answers seem to be "buy now and don't wait" and "yes, it will cost you more to wait to buy."
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Disclaimer: Nothing in this blog article is to be construed as legal advice, tax advice, or financial advice. For legal advice see an attorney. For tax advice or financial advice see a tax attorney, certified public accountant, or other qualified professional.