Hawaii

Saving to Buy a Home? What's the Difference Between Cost & Price?

As a seller, you will be most concerned with the ‘short-term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not with price but instead with the ‘long-term cost’ of the home.

IMG_7326

Many economists have pointed to Brexit (Britain’s exit from the European Union) as a reason that interest rates will remain low for the next few months. But Trulia’s Chief Economist, Ralph McLaughlin, warns that this will not always be the case in a recent post:

“While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts.”

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Freddie Mac all project that mortgage interest rates will increase by close to a full percentage point over the next twelve months.

According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.3% over the next 12 months.

GetMedia (1) GetMedia (4)

4 Bed, 3 Bath, 2,437 Sqft. (MLS# 201615341) | New reduced price to $899,000

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.3% predicted by CoreLogic over the next twelve months:

Saving to Buy a Home? Do You Know the Difference Between Cost & Price? | Simplifying The Market

If you need any information about selling or about buying a home, please contact me.

Aloha for now! See you next time!

MM

P.S. I love my Hoakalei life!

Live the dream…Get your Hawaii Life now.
#MMSellsHawaii

Comments (0) Show CommentsHide Comments (Remember)

Cool. Add your comment...

Your email address will not be published. Required fields are marked *

Leave your opinion here. Please be nice. Your Email address will be kept private, this form is secure and we never spam you.

More Articles from Hawaii Life