Should You Wait to Buy your Next Home?

Maybe.

If you’ve been thinking about moving, one of the questions you are likely asking yourself is this: “Is now the right time, or should I wait for interest rates to go down?

You might be wondering if you can afford the house you want right now or maybe you thought it would be better to save for a bigger downpayment, or for more equity in your current home. Your instinct tells you to hold off and wait.

But, based on recent home price and mortgage rate projections, waiting to buy a home could possibly cost you more.

According to Forbes, expert are saying that buyers sitting on the sidelines today in anticipation of lower prices tomorrow may end up disappointed.

There are three critical ideas to keep in mind before deciding whether to buy now or delay your home purchase for a year or more.

1. Whether home values will be higher
2. Whether mortgage rates will be lower
3. Whether the amount of money you can save, either in cash or home equity, while you wait will make a difference in what you can buy.

Let’s dive into each one of these factors so you make the best decision.

Say you need to take out a $500,000 loan to buy a new home today. With home prices still being on the rise in our area, that same home could require a $520,000 loan by next year and more than a $540,000 loan the year after that. When you add in their projections that mortgage rates may not decrease any time soon, you can start to get the picture of how waiting might cost you.

Due to the lack of inventory, in our area, we’re still seeing a rise in property values and inventory is expected to be low for some time. To boil all that down, your monthly mortgage payment if you make a home purchase today will likely be lower than if you wait a couple of years to buy the same exact house.

Let’s now explore the idea of waiting to save more money for a downpayment.

Get this – for every $10,000 you save, or build in home-equity, only saves you around $75/month on your mortgage payment. So, unless you can save quite a lot while you wait to buy a home, the extra savings isn’t going to make a huge difference.

Of course, there are other factors to consider.

Your location, your income, and your credit score will all have an impact so there is no one cookie-cutter decision that works for everyone.

The general idea to keep in mind is that waiting isn’t always the right answer financially for everyone, even if the market cools and even if you could save more by waiting.

Ultimately, the best time to make a move is when the timing makes sense for your life. Similar to investing in the stock market, you don’t try to time everything exactly because it’s a long-term investment. But it doesn’t always make financial sense to wait for the market to change.

Instead of waiting for much lower prices, experts suggest buying a new home based on your budget and needs. If you find a home you love in an area you love, and it also fits your budget, then chances are it might be right for you.

If you are trying to decide when is the right time, I’d love to help you with that decision. And, no, my answer is not always move now. Also, my answer isn’t the same for every client. My recommendation to each client differs based on that particular client’s financial situation and life plans.

My Job isn’t just to help you buy or sell a home. My goal is to help you make good real estate decisions, so I want to hear from you as you are thinking through things, not just when it’s time to start packing. Reach out to me when you start wondering and daydreaming. I’ll give you all the information I have, Listen to what you want to accomplish, and help you come up with a plan that we’ll execute together when you decide the time is right.

Let’s chat. Send me an email. I can’t wait to hear from you!