We are trudging through the first quarter of the year, and you may be one of the many would-be home buyers asking the same question – should I buy a home now or wait?
Of course, it is a tough question to answer. There are many factors to consider before making the biggest financial decision of your life. You’ll need to check your financial standing, do soul-searching, and market research. And here’s what you need to know on the market side.
Home prices rising and fast-moving market
Home prices in South Carolina have gone up 4.8% compared to last year. Greenville home values is also up by 7.6% over the past year and is expecting to rise up within the next year.
According to Realtor.com®, Greenville-Anderson-Mauldin SC market is currently showing a warm housing market with 66 median days on the market, inventory moving 6% faster than last year and 7 days faster than the US overall. With that being said, many homes in desirable areas and prices are experiencing multiple offers, some receiving far more over asking price, some are selling before they even hit the market. This is an important trend to watch, as it will help you decide whether to buy a house now or buy later.
Mortgage rates on the rise
At the beginning of this year, the average rate for a 30-year fixed mortgage was 4%. Rates have actually come down since then, defying earlier predictions. Currently, the mortgage rate for a 30-year mortgage was holding steady at around 3.87%. So now might be a good time to buy a home.
But what about next year? What might be the scenario if you postpone your home-buying plans until 2018? While there’s no way to predict the future mortgage in precise accuracy, many housing experts expect mortgage rates to rise up due to a strengthening economy and policy changes by the Federal Reserve. Scott Fowler, a loan expert from Guaranteed Rate, for example, shared that interest rate projection can go up to 4.25% by mid-2018.
If mortgage rates and home prices rise, home buyers in 2018 will have less buying power than those who purchase homes now. Even if you are buying a home with the same listing price now versus next year, you will still end up paying more.
Take a look at the infographic below and compare the amount you will pay if you choose to buy now or later. Waiting to buy a home next year can cost you $15,840 more for the same list price of 250,000. You could have also saved $5,040 – $20,880 if you had chosen to buy a home last year.
Looking at current data and expert forecasts, it is wise to buy a home now instead of waiting until 2018.
Buy now or buy later?
Home buyers who wait to buy a house lose out. The numbers and math actually make a lot of sense. Today is always a great time to buy a home. By buying a home now you lock in today’s price and interest rate. Yesterday was better because you could have saved thousands, but tomorrow will be worse because you’ll pay more.