Are you thinking of waiting until prices come back down before you buy? You might be better off buying now, and here’s why.
Should you buy a home now or wait until prices come down?
Whenever someone asks me this question, they’re usually asking because they want to be careful with their finances. If people need to move because they need more space, they tend to just move.
If you’re asking yourself this question, one important factor you must take into consideration is the difference between interest rates and home prices. In general, for every 1% increase in interest rates, buyers’ buying power decreases by 10%.
For example, if you were to buy a $350,000 home with an FHA loan at a 4.75% rate, your monthly mortgage payment would be roughly $1,750. If you wait a year to buy and the home’s price drops to $330,000 but the interest rate for your FHA loan increases to 5.75%, your monthly mortgage payment would increase to $1,850. Even if you buy the home at a cheaper price, you’re still paying more for it. On top of that, your down payment doesn’t affect your monthly payment as much as you think it will.
So, while it’s important to pay attention to how home prices fluctuate, you should be paying more attention to where interest rates are moving, because that will have a greater long-term impact on your home purchase.
If you have any more questions about this topic or you have any other real estate needs, don’t hesitate to reach out to me. I’d be happy to help you.
