Should I Buy a Home Now? Or Wait Until Next Year?
There are a lot of things to consider in making the decision to buy. However, the most common consideration is your opinion on the economy and housing market and that is an important one. I like to advise breaking that opinion down to two separate parts.
First, where do you think home prices are headed? Second, Where do you think home mortgage loan rates are headed? A common misunderstanding in buying a home is the relationship to mortgage rates and home prices.
If your opinion is that both rates and values are headed up, then there is no question--BUY NOW. If your opinion is that both rates and values are headed down, then depending on your personal situation you may want to wait.
The confusion starts when rates and values head in opposite directions. So let me simplify it a bit. When ever values are headed up---BUY NOW.
Many people think that if values are heading down it be better to wait to buy. A normal market has seasonal and small waves in the value trend line. This is the market that I am referencing on a dip in values. Trying to time the market is very difficult.
If mortgage loan interest rates rise in a dropping value market, you typically should BUY NOW because you qualify and have to live with your payment every month. Once you own the property, you don't need to worry about the market value every month. Your monthly mortgage payment can actually be more monthly even if values drop if rates increased. You have to do the math and work with GREAT PROFESSIONALS to see what is best for you.
Trying to save for a large down payment may not be the best scenario either because while you are saving home values and mortgage rates may also be increasing.
- The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
- Freddie Mac predicts interest rates to rise to 4.4% by next year.
- CoreLogic predicts home prices to appreciate by 5.0% over the next 12 months.
- If you are ready and willing to buy your dream home, find out if you are able to!
- CONTACT RODNEY ROSE, 916-223-2775, GetMoneyForYou.com , Facebook.com/MortgageLoansCA