Industry experts are reporting that home prices have increased by 6.7% year-over-year. On the other hand, interest rates have remained historically low which has allowed many buyers to enter the market.
What does this mean? Sellers will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. Buyers, however must not be concerned about price, but instead about the ‘long-term cost’ of the home.
The Mortgage Bankers Association (MBA), 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 5.2% over the next 12 months.
What Does This Mean as a Buyer?
If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:
Waiting means paying an extra $153.81 each month over a 30 year period. Hmm!
Visit us at hfamiami.com/homebuyers for information on our first time home buyers mortgage.
Note, this information is provided compliments of Keeping Current Matters.