Should you buy now or buy later? At the time of this writing (early summer 2018), the answer is:
BUY! BUY NOW!
That might seem a little dramatic, but it’s really true.
There are a lot of reasons that now is the time to buy and waiting could get expensive.
- At this point, all indications are that interest rates will continue to rise. A half point rise interest on a $250,000 home will cost you about $22,000 over the life of the loan or about $70 a month.
- Home prices in some areas have risen 15% in just the last year. Overall, across the US, home prices have increased nearly 7% on average. That increase on a $250,000 home represents an increase of $33,000 in the price of the home over the term of the mortgage.
- Home inventories are shrinking and, in some areas, are nearly non-existent. There has been a struggle to keep existing homes on the market. The next big generation, the Millennials, are headed to work and have families. They are seeking homes, but the last big generation, the baby boomers, are still in their homes.
- New homes aren’t coming online quickly. Builders who got burned in 2006 and 2007 are loathed to put a ton of money into new buildings now. The entire country is feeling the crunch of slow housing growth. While builders are generally busy, there is not the sense of urgency there was during the last solid housing market. The entire system is a still afraid to make any bold moves.
The situation is still good enough that most families can afford to buy a house, but soon the home prices will rise a great deal and mortgages will get more expensive. The impact your interest rate makes on your monthly mortgage can be costly, lock in a low rate now while you can.