If you’re thinking about buying a home, should you buy sooner or later? Home prices are predicted to rise by 11% in 2022, and mortgage rates are expected to increase to 4%. That means if you wait to buy, it could cost you a lot more.
Here’s an example of just how much more you might pay if the price and mortgage rate went up that much on a $400,000 home:
|Lower Price and Rate||Higher Price and Rate|
|Mortgage Interest Rate||3.500% | 3.584% APR||4.000% | 4.078% APR|
|Mortgage Payment Difference||–||$259/month ($31,080 after 10 years)|
As you can see, the extra cost of buying at a higher price and rate is significant, and that’s just for a $400,000 home. The more expensive the home, the bigger the impact of a price and rate increase. For an $800,000 home with the same percent price increase and the same rate difference, the increased cost would be $518 a month or $62,160 after 10 years in added mortgage expenses!
In conclusion, if you’re ready to buy a home, purchasing sooner rather than later may save you a lot of money. If you’d like to get started on a home purchase, get in touch for a free mortgage consultation.
APR = annual percentage rate. Based on a 30-year fixed-rate mortgage with a 20% down payment. Includes principal and interest payments only. Does not include taxes, insurance and other homeownership costs. Prices and rates are used for example purposes only. Predictions are not guaranteed outcomes.