“The risk of a wrong decision is preferable to the terror of indecision.” – Maimonides
Whether you agree with the quote above or not, by delaying your decision to buy in today’s market it will cost you more. Indecision has lost more money than any bad decision every did.
As I have reported to you before, homeowners with Fairfax homes for sale home prices have risen by a considerable amount and in almost every real estate market across the country this past year. Although housing inventories are growing, home prices are expected to continuing rising as well. From the beginning of May, mortgage rates have risen one percent. It is anticipated rates will hit five percent by the end of 2013 and go even higher in 2014.
Several of this country’s financial experts believe that until rates reach around seven percent the economy will not be strong.
Let’s look at two components that affect the cost of housing; price and mortgage rates. A change in either one individually will affect the market, but when both rise together, the affect can be dramatic. This dramatic change can eliminate buyers who would have been eligible if they had purchased earlier in the year and homeowners with Fairfax homes for sale. Taking buyers out of the Fairfax market means “Days on Market” times will increase and homes will take longer to sell.
Here is an example of how these two components can affect you. Let’s start with a $200,000 home. If the price rises three percent and the mortgage rate rises one percent, your monthly payment would rise by $150.81 and the total price of the home would be $6,000 more. Your down payment might not change, but you will have to borrow more money. By not buying now, it translates to a higher home price and a higher monthly payment. You would also lose any appreciation or instant equity compared to if you had purchased before the home price rose.
Below I have provided a “Cost of Waiting to Buy” graphic that will show you the effect of waiting. Substitute my numbers with your personal projections for a more accurate reflection of your situation.
If you think you are ready to buy now, but are indecisive, call me and let’s talk. Sometimes just talking with a local real estate professional can alleviate that indecision.