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by:
In the three years leading up to March 2022, the housing market was so competitive that it was common to pay $25,000 or more over the asking price and not get any concessions from the seller.
Yes, the interest rates were lower, but that market had a lot of disadvantages compared to the one we have now.
If we consider that interest rates are currently 1.5% higher, that equates to about $300 more in monthly mortgage payments, and even if it takes two years for rates to go back down, you'll pay $7,200 more in interest over the next two years. When you consider that you can often get up to $6,000 or more in seller concessions at the asking price or below, it makes a lot more sense to buy now.
When we break down the numbers, they look like this:
From January 2019 to March 2022, an extra $25,000 over the asking price means $25,000 in added costs.
In the current market, assuming rates don't go down for at least two years, which is highly unlikely: Extra interest of $7,200 minus seller concessions of $6,000 equals $1,200 in added costs.
You can see that buying now instead of waiting saves you $23,800. This doesn't take into account how much your home will increase in value over the next two years.
Please contact me if you have any questions or would like to start the pre-qualification process.
*Rates quoted are based on the examples above. Rates are subject to change and are subject to borrower qualification.
