National home prices have increased by 5.4% since this time last year. Over that same time period, interest rates have remained near historic lows which has allowed many buyers to enter the market and lock in low rates.
As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price but instead about the ‘long-term cost’ of the home.
The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Insights Report, home prices will appreciate by 4.8% over the next 12 months.
What Does This Mean as a Buyer?
If home prices appreciate by 4.8% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:
If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.
SOURCE: Keeping Current Matters
I take pride in building my business through referrals and trust. Looking for a local expert to help you navigate in the current real estate market with results? My team and I can help you through the buying and selling process, do call me at 707-567-1049.
Kasama Lee is a top-producing Realtor® and a community contributor specializing in the Napa and Solano Counties. Kasama and her husband, Barton, are raising their two boys in American Canyon and have been residents since 2002. They’re proud to contribute and give back as residents of this warm, friendly and supportive community.