Did Waiting to Buy a Home Make Sense?

Many debated whether or not 2014 was the right year to buy a home, and ultimately decided it was best to wait.

Now that annual revisions are coming in, lets take a look and see whether or not it made sense to wait to buy.

On January 2nd, 2014, the 30-year fixed rate was reported at 4.53% by Freddie Mac. Your monthly mortgage payment for a $250,000 home would have been $1,271.17.

Now, our interest rates have dropped below 4%, and ended 2014 at 3.87%. However, home prices appreciated by 4.8% over the same time, according to the Home Price Expectation Survey.

That same $250,000 home you would have purchased has now appreciated by $12,000 and costs $262,000. Your monthly payment for this home, at a 3.73% rate (as recently reported by Freddie Mac), will be $1,210.39

If you waited a year to buy the same home, your payment would be $60.78 less than the previous year.

Did Waiting to Buy a Home Make Sense?

On paper, it's easy to say, "See? I've saved $60 a month on a payment, waiting a year made total sense."

True, over the course of the year, $729.36 was saved. But what they haven't realized is that the price of the home they purchased went up by $12,000. Even if a down payment of just 5% was placed on the home, these homeowners now have to come up with an additional $600 at the very start of the process.

So, in reality, these hypothetical homeowners really only saved $129.36 in a year - $11 a month.

Is a savings of $11 a month really worth holding off on pursuing a home that you've been dreaming about? Is it worth holding off on building equity? Having a save comfortable environment that fits your family's needs? Having full control over your space?

The bottom line?

Experts are expecting home prices to appreciate about 4%, and interest rates are anticipated to increase by a full percentage point by the end of 2015. If you are able to buy a home now, it is in your best interest to buy now.

Questions? Wondering what these numbers mean for you? Don't hesitate to send us an email or give us a call! We would love to help.

Real Group Real Estate

Contact Our Team Today

Contact Us
Please enter your name!
Please enter your email!
Write your message!

Search Our Blog



Subscribe to our Newsletter

Baird & Warner

2526 N Lincoln Ave
Chicago, IL 60614

Login Form