- Waiting until 2022 to buy a home could cost you thousands of dollars thanks to home price appreciation and increased mortgage rates.
- New housing inventory is beginning to increase in the Triangle area, so now is the time for prospective buyers to make their moves!
- If you’re wondering whether you should buy a home now, don’t hesitate to contact Linda Craft & Team to discuss your options.
Prospective buyers should be pondering this…
The Triangle market has been skewed towards sellers for more than a year now, but we’re finally starting to see signs of a shift. As new housing inventory begins to increase, now is the time for prospective buyers to pounce! However, many people are wondering whether they should buy now or wait until next year. To make your final home-buying decision, you need to factor in two things: home price appreciation and mortgage rates.
Here’s what to expect from next year’s home prices
We’re going to get straight to the point—home price appreciation will still be prevalent in 2022. In fact, three housing industry leaders have forecasted prices to increase next year, including Freddie Mac by 5.3%, Fannie Mae by 5.1%, and Mortgage Bankers Association by 8.4%. And by taking the average of the three projections (6.27%) and applying it to a $350,000 home, that home would then be valued at $371,925 by the end of 2022—that means waiting to buy could cost you over $20,000.
Are mortgage rates going to rise by the end of 2022?
Even the slightest increase in mortgage rates impacts your purchasing power as a homebuyer, so it’s important to do your research. While the 30-year fixed mortgage rate is nearing historic lows right now, many experts predict rates will rise as our national economy recovers. The previously mentioned housing industry leaders looked forward to the fourth quarter of 2022—and what they all saw were increased mortgage rates.
The increases included Freddie Mac at 3.8%, Fannie Mae at 3.2%, and Mortgage Bankers Association at 4.2%. According to all three forecasts, we can expect mortgage rates to rise by an average of 3.7%, which is almost a full percentage point higher than today’s rates.
So if both property values and mortgage rates rise…
If both home values and mortgage rates increase, your mortgage payment will naturally go up, too. The above chart estimates the mortgage payment of a $350,000 home purchased this year, with a 30-year fixed rate loan at 2.86%. By using Smart Asset’s mortgage calculator, you can determine that the mortgage payment on this property would be about $1,899. And when you factor in 2022’s heightened home values and mortgage rates, that same property could have an even higher mortgage payment of $2,166. The potential cost of waiting until next year would be $267 per monthly mortgage payment—that’s $3,204 more per year.
Buy a Home Now to Fit Your Home-Buying Budget
Prices are expected to continue increasing into next year—so now is the time to secure a home in the Triangle within your budget. And when you’re thinking about whether you should buy a home, you should also consider the non-financial factors of homeownership. To learn more about buying a home in the Triangle—and to do so strategically—contact Linda & Craft Team today!