Despite rising home prices, low inventory, and bidding wars, Americans are buying homes in record numbers. According to the National Association of Realtors, more homes were bought in 2020 than any year since ’06. The question is…
Should you buy now or wait until later?
Rates are still at all-time lows with an Average of 2.96% for the last quarter, down from 4% in 2019. Market experts expect that number to increase significantly in the next 2 years. On a 400,000 dollar home purchase, the difference in payment if rates were only a half percent would be about 100 dollars a month, but over 30 years that savings would be $30,000
Here’s another reason to buy now: Rising home values create equity. Home prices have risen over 15% this past year. There are plenty of mortgage options that will get you in with little money, such as FHA 3.5% down, and other programs offering between 3% and no down payment.
To Sum Up: You may need to settle for a home that doesn’t check off every box on your list given the low inventory of homes available. However, it all comes down to your monthly mortgage payment. Because rates are still at an all-time low, the result is a more affordable monthly payment, fewer long-term interest costs, and a bigger home buying budget.