CoreLogic recently shared that national home
prices have increased by 4.7% year-over-year. Over that same time period, interest
rates have remained historically low which has allowed many
buyers to enter the market.
As a
seller, you will be most concerned about ‘short-term price’ –
where home values are headed
over the next six months. As a buyer, however, you must not be concerned about price,
but instead about the ‘long-term cost’ of
the home.
The Mortgage
Bankers Association, Freddie Mac, and Fannie Mae all
project that mortgage
interest rates will increase by this time next year. According to CoreLogic’s most recent Home
Price Index Report,
home prices will appreciate by 4.6% over the next 12 months.
What Does This Mean as a Buyer?
If
home prices appreciate by the 4.6% predicted by CoreLogic over the next twelve months, here
is a simple demonstration of the impact an increase in interest rate would have
on the mortgage
payment of a home selling for approximately $250,000 today:
Bottom Line
If
buying a home is in your plan for this year, doing it sooner rather than later
could save you thousands
of dollars over the terms of your loan.
Source: Keeping Current Matters