Expert Contributor
Rates rise, appreciation slows and homeowners are waiting it out.
Do you know the cost of WAITING?
By Lynn Eskew, NMLS 310381 and Kelly Stewart Allen, NMLS 261078 Diversified Capital Funding, NMLS 1850
T
he cost of waiting to buy is defined as the additional funds it would take to buy a home if prices and interest rates were to increase or prices were to decrease, and interest rates were to increase. If you are wondering if the rise in mortgage interest rates continues, doesn’t that mean that home prices will decline? In actuality, mortgage rates tend to rise when the economy is growing, but factors like inventory and cost of construction drive housing prices. In the Danville area, for every 1% increase in interest rates (and rates currently are up almost 1% over last year), housing prices would need to decline between
9 and 11 percent for a buyer to have the same purchasing power as they had when rates were lower. The last time mortgage interest rates reached levels reported in August and September of this year was in 2011. Current predictions are for year-overyear national home price appreciation to be 4.7% in the period of August 2018 to August 2019. Home prices rose 5.5% in the same period year-over-year ending 2018. Questions about your home’s equity, the housing market or your cost of waiting? We can help!
For more information, contact Lynn Eskew, NMLS 310381 at 925-8990777, Lynn@divcap.net or Kelly Stewart Allen, NMLS 261078 at 925-457-1738 kelly@divcap.net Sources: CoreLogic, Trulia, National Association of Realtors (NAR)
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