$\"Two$ <\/p>\n

If you\u2019re a homeowner who\u2019s 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.<\/span><\/p>\n

To determine whether you should buy now or wait another year, you can ask yourself two simple questions:<\/p>\n

Where will home prices be a year from now?<\/strong><\/li>\n
Where will mortgage rates be a year from now?<\/strong><\/li>\n<\/ol>\n
Let\u2019s shed some light on the answers to both of these questions.<\/p>\n
Where Will Home Prices Be a Year from Now?<\/strong><\/h4>\n
Three major housing industry entities are projecting ongoing home price appreciation in 2022. Here are their forecasts:<\/p>\n
\n
Fannie Mae<\/em><\/a>: 7.4%<\/li>\n
Freddie Mac<\/em><\/a>: 7%<\/li>\n
Mortgage Bankers Association<\/em><\/a>: 5.2%<\/li>\n<\/ul>\nAccording to the National Association of Realtors <\/em>(NAR), the median price of a home today is $353,900<\/a>. Using an average of the three price projections above (6.53%), a home that sold for $353,900 today would be valued at $377,010 at the end of next year. As a prospective buyer, you would therefore pay an additional $23,110 by waiting.<\/p>\n
Where Will Mortgage Rates Be a Year from Now?<\/strong><\/h4>\nToday, Freddie Mac<\/em> estimates<\/a> the average 30-year fixed mortgage rate in the fourth quarter of this year will be 2.8%. 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:<\/p>\n
\n
Fannie Mae<\/em><\/a>: 3.4%<\/li>\n
Freddie Mac<\/em><\/a>: 3.8%<\/li>\n
Mortgage Bankers Association<\/em><\/a>: 4%<\/li>\n<\/ul>\n
That averages out to 3.73% if you include all three forecasts. Any increase in mortgage rates will increase your costs.<\/p>\n
What Does It Mean for You if Home Values and Mortgage Rates Increase?<\/strong><\/h4>\nIf both variables increase, you\u2019ll pay a lot more in mortgage payments each month. Let\u2019s assume you purchase a $353,900 home in the fourth quarter of this year with a 30-year fixed-rate loan at 2.8% after making a 10% down payment. According to mortgagecalculator.net<\/em><\/a>, your monthly mortgage payment would be approximately $1,309 (this does not include insurance, taxes, and other fees because those vary by location).<\/p>\n
That same home one year from now could cost $377,010, and the mortgage rate could be 3.73% (based on the industry forecasts mentioned above). Your monthly mortgage payment after putting down 10%, would be approximately $1,568. $\"Two$ <\/a>The difference in your monthly mortgage payment would be $259. That\u2019s $3,108 more per year and $93,240 over the life of the loan.<\/strong><\/p>\n
Add to that the approximately $23,110 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 $115,000 (the $93,240 mortgage savings plus the $23,110 potential gain in equity if you buy now)<\/em>.<\/p>\n
Bottom Line<\/strong><\/h3>\nWhen asking if you should buy a home<\/em>, you may think of the non-financial benefits<\/a> of homeownership. When asking when to buy<\/em>, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.<\/p>\n<\/div>\n\n<\/body>","protected":false},"excerpt":{"rendered":"
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