Think you're being smart by saving more for a down payment? You just might be throwing money out the window...
According to CoreLogic, national home prices increase by an average of 5% this past year.
However, if you are financing your home, it's not just the 5% that you'll end up missing out on, if you wait to buy. We have to think about the increase in monthly payment as a result of mortgage rate hikes.
Let's assume that mortgage rates increase by .50% next year, and we're going to take out a $300K mortgage on a $360K home.
That increase in interest rates means you're paying $82 more each month, $984 more a year, and $29,520 more over the course of 30 years! Just by missing out on a .5% mortgage rate difference!
Add that to the 5% annually home appreciation on $360K and we're looking at a total opportunity cost of $47,520 over 30 years, just by waiting one year to buy.
Want to see how much home you can afford based on a monthly payment and the current mortgage rate? Check out our Maximum Home Value Calculator here!