If you’ve been thinking of buying a home in the LA area but you’re hesitant to get started, you might want to stop hesitating and start doing. A recent study by Keeping Current Matters shows that waiting until next year to buy could cost you BIG.
Here’s the breakdown of exactly how much waiting will cost you.
What Factors Affect Home Costs?
First, let’s take a look at which numbers come into play in calculating the “cost” of buying a home. First and foremost: interest rates, which are constantly on the move. Next, home prices, which also vary month to month and year to year, but typically increase over time. Together, these make up the bulk of your mortgage payment.
Understanding how each of these numbers is expected to change over time is crucial to understanding how much your home is going to cost you now… and next year.
Mortgage Rates Are Low… But on the Rise
Current mortgage rates are lower than they’ve been in years—which is fantastic news for buyers. It literally means your mortgage is going to cost you less. Though they’re expected to stay low throughout most of 2019, they are expected to increase as much as 0.2% by the end of 2020.
That might not seem like a lot, but that small amount adds up fast when you start talking big numbers, like home prices.
Home Prices Are Also Rising
Not only is your mortgage going to cost you more, your home’s going to cost more, too. In fact, over the next 12 months, home prices could increase as much as 4.8%—that’s $12,000 on a $250,000 home!
Your Home Will Cost You This Much More in 2020
You buy a home right now for $250,000 at an interest rate of $4.3%. So your monthly mortgage payment (principal and interest) is $1,231.60. Not too bad, right?
You buy that same home next year. This time around, it costs $262,000, and your interest rate is 4.5%. That puts your monthly payment at $1,321.04.
Per month, next year’s cost is $89.44 more, or roughly a coffee a day. Annually, it’s about $1,073.28 more… or the price of a weekend getaway. Do you want to know what that comes out to over a 30-year mortgage?
That’s right. Waiting until next year to buy a home could cost you a new car.
Are You Ready to Buy Now?
If you’re rethinking the wait to buy your home, or you want to ask more questions about the actual costs of buying a home, feel free to contact Brad Korb Real Estate Group. We’re here to help you out, every step along the way.