In recent years, we have seen the value in home prices fall. A sad situation. Today, all indications are that the housing market is on the rebound. You have seen it on the news and unless you've been hiding under a rock, you have probably seen the flurry of activity in your own neighborhood.
I've said it here before, too. Buyers are out and inventory is low. So what's with that? Well, I believe there are home Sellers who are still on the fence. Is now really a good time to sell or should I hold out and wait for prices to increase even further?
While we all enjoy a market where home prices increase over time,
the undeniable fact is that the replacement homes that those Sellers will be
purchasing in the future will also be more costly. Result: If you sell your
current home for $25,000 more in the future, but have to pay $25,000 more for
the replacement home you are purchasing, you have gained nothing by waiting.
So, what have you potentially lost? Answer: The current market interest rates.
Currently hovering just under 4%, there is much agreement in
financial circles that rates will begin to rise into the 4.5% - 5.5% range as
early as the end of this year. In strictly numerical terms, if you buy a
$250,000 home with 20% down, your $200,000 loan (which at 4% would cost $955
per month), would cost $1075 per month at just 5%...that’s an extra $1,440.00
per year! Adds up rather quickly. Just some food for thought.
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