Thinking about waiting for “after the holidays” or “spring season” before considering buying a home? KW research found that a buyer strategy of “wait and see” for home prices or interest rates drop even more before deciding to buy could be more of a gamble that you’d think. With interest rates already at historical lows, their findings show that the reality of current market conditions is this…
- A 1% increase in interest rates is 10 times more likely to happen before a 10% drop in home prices.
- A 1% increase in interest rates, prices being stable, may increase your monthly payment lowering your affordability.
- A 10% decrease in home prices may lower your monthly payment but rates must stay the same.
- The probability of both happening at the same time is ridiculously small, and homeowners would pay approx 15% more in interest over the life of the loan.
The bottom line…”For those who can afford to buy, trade up, or invest, our current market presents a lifetime opportunity.” – Jay Papasan, VP of Publishing and Executive Editor, Keller Williams Realty
Check out Jay’s KW blog post for further details and illustration of the impact on a $250,000 home: