Everyone knows the real estate market in the Denver Metro area is hot. Most analysts don’t anticipate a slowdown in rising prices in the near future.
We’ve heard from quite a few buyers recently that they are going to “wait a year to buy.” Reasons vary among buyers, but most tell us that they are going to use the year to save more for a down payment so that they can lower their monthly payments and afford a bigger home.
While I always applaud taking a conservative approach to saving and investing, most people aren’t factoring in all the variables when they make this decision.
While home prices continue to appreciate by 10% each year, we are also seeing slowly rising interest rates and indications that rates are set to increase more in 2019.
The chart below shows the change over the past year for the average priced home in Metro Denver, and the anticipated change in 2019. The chart also shows the mortgage payment based on the purchase price and the current mortgage rate.
As you can see, not only will waiting a year cost you over $40,000 to buy the same home, but with the rising interest rates, your purchasing power will decrease even more. (We used a low estimate of 5% to figure the mortgage payment for 2019. Some mortgage professionals are saying that 5.5% is not out of the question.)
Everyone has various reasons for waiting to buy, but our job is to help you make the most informed decision.
If you have any questions, please feel free to contact us.