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Is waiting to buy a home worth it?

Being in real estate for multiple decades, we see a lot of cycles.  We get asked by everyone “Is this a good time to buy”.  If you want a different home, it is always a good time to buy.  With limited numbers of homes for sale, it may take longer to find that dream home but you should not give up looking.  I am reminded of a quote from the movie Billy Madison.

“Whoa whoa whoa, Miss Lippy. The part of the story I don’t like is that the little boy gave up looking for Happy after an hour. He didn’t put posters up or anything, he just sat on the porch like a goon and waited. That little boy’s gotta think You got a pet. You got a responsibility.”

If you want a dream home for your family, you have a responsibility to find it.  You can’t wait for the perfect market because your dream home may already be gone then.

We also get asked by people about trying to time the market because they think prices are too high.  First off, I would say it is worth it for most people even if you “mistime” the market and end up paying a few dollars more per month but you find the dream home for your family.  In today’s world of the Federal Reserve signaling that they are increasing rates, you could end up paying more per month for a home by trying to time the market to get the lowest price for the home.

I have included a little chart below that shows the correlation between price, interest rate, and payment.  In the first set of numbers, the interest rate stays the same but the price goes down 1% per line.  You can see the payment goes down by about $20 with each 1% drop in price.  In the second set of numbers, the price stays the same but the interest rate goes up.  You can see that the price goes up by about $20 with each 1/8 percent rate increase.   Even if something crazy happens and prices do go down 3% but rates increase by 3/8, there would be no difference in monthly payment.  Without a dip in prices, you just cost yourself $60 per month in interest.

If you want to run numbers on your own house, click here for our mortgage calculator or call CityWorth and we can help you through the entire process.

 

Price Interest RatePayment
$        300,0003.875%$             1,868
 $        297,0003.875%$             1,850
 $        294,0003.875%$             1,833
 $        291,0003.875%$             1,815

 $        300,0003.875%$             1,868
 $        300,0004.000%$             1,888
 $        300,0004.125%$             1,909
 $        300,0004.250%$             1,930

 

 

 

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