With interest rates still in the low 4%’s, many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year.
If you look at what the experts are predicting for 2015, it may make the decision for you.
Predictions for 2015 3Q:
4.6% - Fannie Mae
4.8% - Freddie Mac
5.2% - Mortgage Bankers Association
Even an increase of half a percentage point can put a dent in your family’s net worth.
Let’s look at it this way…
Based on an example of a monthly payment (principal & interest only) on a $250,000 home today, with a 4.1% interest rate would be $1,208.
If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4% making that home cost $10,000 more at $260,000.
If we take Freddie Mac’s rate projection of 4.8%, the monthly mortgage payment climbs to $1,364.
Some buyers might not think that an extra $156 a month is that bad. But over the course of 30-year mortgage you have spent an additional $56,160 by waiting a year.