Saving to Buy a Home? Do You Know 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.

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.

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: http://www.simplifyingthemarket.com/en/2016/07/11/saving-to-buy-a-home-do-you-know-the-difference-between-cost-price/?a=242769-4eb2112ad1caac540e99a63dd199d5ed ❤️ #share #mortgage