Search

Leave a Message

Thank you for your message. We will be in touch with you shortly.

A cozy living room with a stone fireplace, furniture in various textures, and a pool view from floor-to-ceiling windows.

Two Reasons Why Waiting to Buy a Home Will Cost You

Sandy Ginn January 19, 2022

 
If you’re a homeowner who’s decided your current house no longer fits your needs, or a renter with a strong desire to become a homeowner, you may be hoping that waiting until next year could mean better market conditions to purchase a home.
 
To determine whether you should buy now or wait another year, you can ask yourself two simple questions:

  1. Where will home prices be a year from now?
  2. Where will mortgage rates be a year from now?
Let’s shed some light on the answers to both of these questions.
 

Where Will Home Prices Be a Year from Now?

Three major housing industry entities are projecting ongoing home price appreciation in 2022. Here are their forecasts:
 
According to the National Association of Realtors (NAR), the median price of a home today is $353,900. Using an average of the three price projections above (6.5%), a home that sold for $353,900 today would be valued at $376,904 at the end of next year. As a prospective buyer, you would therefore pay an additional $23,004 by waiting.
 

Where Will Mortgage Rates Be a Year from Now?

Today, Freddie Mac announced their 30-year fixed mortgage rate was at 3.1%. However, most experts believe mortgage rates will rise as the economy recovers. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above:

That averages out to 3.7% if you include all three forecasts. Any increase in mortgage rates will increase your costs.
 

What Does It Mean for You if Home Values and Mortgage Rates Increase?

If both variables increase, you’ll pay a lot more in mortgage payments each month. Let’s assume you purchase a $353,900 home today with a 30-year fixed-rate loan at 3.1% (the current rate from Freddie Mac) after making a 10% down payment. According to mortgagecalculator.net, your monthly mortgage payment would be approximately $1,360 (this does not include insurance, taxes, and other fees because those vary by location).
 
 
That same home one year from now could cost $376,904, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment after putting down 10%, would be approximately $1,561.The difference in your monthly mortgage payment would be $201. That’s $2,412 more per year and $72,360 over the life of the loan.
 
Add to that the approximately $23,004 a house with a similar value would build in home equity this year due to home price appreciation, and the total net worth increase you could gain by buying this year is over $95,364 (the $72,360 mortgage savings plus the $23,004 potential gain in equity if you buy now).
 

Bottom Line

When asking if you should buy a home, you may think of the non-financial benefits of homeownership. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

Recent Blog Posts

How to Increase Your Home’s Curb Appeal in a Weekend

Boost your home’s first impression with simple weekend projects that instantly elevate curb appeal—no major renovations required.

Understanding the Home Appraisal Process: What Buyers & Sellers Should Know

Understanding the home appraisal process can help buyers, sellers, and homeowners navigate property valuation with confidence and avoid potential setbacks.

What to Look for in Your First Home

Navigating your first home purchase? From location and lifestyle to budget and long-term value, here’s what to consider to make the right choice.

2025 Interior Design Trends: What’s In for the Year Ahead

Discover the top 2025 interior design trends, from warm earthy tones to statement stone surfaces and vintage charm, for a home that feels inviting and stylish.

Selling Your Lakefront Property in Indiana

Feel peace of mind knowing you’ll get maximum value from your lakefront property.

Which Mortgage Loan Is Best for You?

Find the right mortgage loan for your financial situation and homeownership goals with this comprehensive guide to conventional, FHA, VA, USDA, and jumbo loans.

10 Key Factors to a Successful Downsizing Journey

A Step-by-Step Guide to a Smooth and Rewarding Transition to a Simpler Lifestyle in 2025.

2025 Indiana Real Estate Outlook: Key Insights for Buyers and Sellers

What Buyers and Sellers Can Expect in Indiana’s 2025 Real Estate Market.

10 Luxury Yet Simple Updates to Increase Your Home's Value

Want to increase your home’s value and appeal to today’s buyers?

Work With Us

With experience in every type of real estate transaction, we aim to deliver sound advice, extensive research, and tenacious negotiating in order to secure incredible results for our clients. Every opportunity to serve our clients is a beautiful gift worth cherishing.