If you were thinking about buying a house last year, but didn’t, it will very likely cost you more to get the same house this year. Assuming a loan of $250,000, at 3.5 percent interest, your principal and interest payment last year would have been $1122.61. According to the Roanoke Valley MLS statistics, homes in the Roanoke area went up in price by an average of 7.0% between July 2012 and July 2013. During the same time period, mortgage rates went up to about 4.5%. By waiting a year, it will cost an additional $232.77 a month for the same house, if you take into account the increase in home price and the higher mortgage rates. That’s almost $2,800 a year more.
My reason for pointing this out isn’t to discourage you from buying this year. You might be thinking to yourself, “my friend got a 3.5 percent interest rate and now I’m stuck with a 4.5 percent. Maybe now is not the time to buy because I’m paying almost a full point more than my friend paid 12 months ago.”
Well let’s put this in perspective. During the last four decades—1983, 1993, 2003 and 2013—let’s take a look at the monthly payment on a $250,000 mortgage. Take a minute to So even though you might be paying more than your friend paid last year, let’s take a look at what you’d be paying compared to 1983, 1993, 2003.
From a historical perspective, you’re still doing really well! We don’t have a crystal ball, and can’t tell you exactly where prices and rates will be this time next year. If this trend continues, though, you’re much better off to buy now.
My job is as Director of Technology/Education, and I work with a fabulous group of real estate agents at Prudential Premier REALTORS in Roanoke and Botetourt. Every one of them is qualified and enthusiastic about assisting with a home purchase. Visit our website to search for Roanoke area homes, or call 540-343-5000 in Roanoke or 540-966-3033 in Botetourt. We’d be delighted to help you.