With rates climbing and the promise of two or three additional federal rate hikes this calendar year, it’s important to be prepared. Even if you don’t feel you’re ready to buy this year, take a look at the infographic below to see what happens to a potential purchase with a rate of 4.8%.What you want to look at is whether you can save enough money fast enough to keep up with both the raise in interest rates and the 1% a month (or more) increase in prices.
As an aside, my favorite loan officer tells me that rates for very well qualified buyers this week was about 4.375%, already higher than this example.
- The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
- Freddie Mac predicts that interest rates will increase to 4.8% by this time next year, while home prices are predicted to appreciate by 4.8% according to CoreLogic.
- Waiting until next year to buy could cost you thousands of dollars a year for the life of your mortgage!