Expert Contributor
Rates rise, appreciation slows and homeowners are waiting it out.
Do you know the cost of WAITING?
By Erik Oberbruner, Sr. Mortgage Consultant, NMLS#433990, 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!
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For more information, contact Erik Oberbruner Sr. Mortgage Consultant, Diversified Capital Funding Cell (925) 586-5474 NMLS#433990/1850 Sources: CoreLogic, Trulia, National Association of Realtors (NAR)
DECEMBER 2018
