For many families, summer is the perfect time of the year to move. Have you been considering it? Many people, just like you, are sitting on the fence trying to decide if now’s the time to buy a new Contra Costa home. It may be that you are renting and have a strong desire to become a homeowner, but are unsure if buying right now makes sense. For others, it may be that you are already a homeowner and realizing that your current home no longer meets your changing lifestyle, wants, and needs.
So the big question is- is it time to move? To determine if you should buy now or wait another year, you need to ask two simple questions:
Do I think home values will be higher a year from now?
Do I think mortgage rates will be higher a year from now?
Don’t worry; you don’t need to answer these questions on your own. You have The Frazzano Tse Team to help you! When you call (925) 890-0285 or email Joe@FrazzanoTeam.com, we’ll talk with you about these and find the answers that work for you. Let’s look at both of these questions and their possible answers in more detail.
Next Year’s Home Prices
If you average the most recent projections from the major industry forecasters, the expectation is home prices will increase by 7.7%. We’ll use this number in a quick example. Let’s say a house is valued at $500,000 as an example. If you make a 10% down payment ($50,000), you’ll end up borrowing $450,000 for the mortgage. Applying the projected rate of home price appreciation, that same house will cost $538,500 next year. With a 10% down payment ($53,850), you would then have to borrow $484,650. When you look at this example, you can see that as a result of rising home prices alone, a prospective buyer will have to put down an additional $3,850 and borrow an additional $34,650 just for waiting a year to make their move.
Consider Mortgage Interest Rates
What you end up paying each month involves more than just the price you pay for the home. You also need to factor in the interest rates. Today, mortgage rates are hovering around 3%. This is incredibly low, and it won’t stay this way for long. Most experts believe they’ll rise as the economy continues to recover. You will end up paying a lot more in mortgage payments each month if both home prices and mortgage rates increase the way experts predict they will.
We encourage you to contact our team soon. The Contra Costa real estate market is hot and not slowing down anytime soon! If you wait a few days or weeks, your Alameda County dream home could be long gone!