Yesterday we discussed Zillow CEO Spencer Rascoff’s rationale for why you should sell your home now.
It comes down to rates: they’re going to keep rising thanks to still-constrained supply hitting pent-up demand.
So if you’re in the trade-up market, it’ll be more expensive to buy a home at a given price down the road than now.
Redfin has actually calculated exactly how much you can expect to save if you punch out today:
And here’s their explanation (emphasis ours):
You can see that even though this homeowner would make $61,000 more by waiting to sell, the new house is $64,000 more expensive too, a difference of $3,000 in favour of moving up now.
But that’s not the complete picture. The monthly payment, which is driven by interest rates, will be lower for those who move up now vs. later.
Just in the next 12 months, the Mortgage Bankers Association expects rates to rise to 4.4%, which would mean a $130 higher monthly payment.
And that’s a conservative estimate. A typical interest rate, if you look at the past 20 years, is more like 6.5 per cent, which is about $500 more per month, or an additional $6,000 per year out of pocket for the move-up buyer who waits.
They also have a handy calculator:
With inflation still pretty subdued, you could do a lot with an extra $6,000 a year.
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