Is Buying a House Today a Good Investment?
If your needs change and you believe you need to move, whether you're buying your first home or selling your current one, the decision can be difficult. You may need to consider personal or professional factors, and only you can decide how much of an impact those factors should have on your desire to relocate.
One category, however, has a straightforward answer. The financial aspect of the purchase is easy to determine when deciding whether to buy now or wait until next year. All you have to do now is ask yourself two questions:
1. Do I think home values will be higher in a year's time?
2. Do I think mortgage rates will be higher a year from now?
If you answered yes to either question from a purely financial perspective, you should strongly consider purchasing now. If you answered yes to both questions, you can buy right away.
Nobody can predict how much home values or mortgage rates will rise or fall by the end of the year. Experts, on the other hand, appear to be certain that the answers to both questions are a resounding "yes." Mortgage rates are expected to increase, while house values are expected to rise significantly.
What this means for you?
Let's take a look at how waiting could affect your finances. The following are the assumptions that were made for this example:
1. Mortgage rates will be 3.18 percent at the end of the year, according to the analysts.
2. Home values will rise by5.9%, according to the experts.
3. You want to buy a $350,000 house right now.
4. You decide on a 10% down payment
The cost of waiting are as follows:
1. The house costs you an additional $20,650.
2. For a down payment, you'll need an extra $2,065
3. You pay an extra $116 per month ($1,392 extra per year) on your mortgage.
4. You don't get the $20,650 rise in wealth by accumulating equity.
When purchasing a home, there are numerous factors to consider. However, if you find a home that meets your needs now, it makes far more financial sense to buy now rather than next year. Let's connect and I'll assist you in buying your dream home right now.