As we approach the end of November, there has been an increase in new home construction and builder confidence, while rates remain low and unemployment claims start to rise.
Summary: Are you thinking of buying a home in Washington or Oregon, but aren’t sure if you should make the leap right now or wait until next year? You might see others transitioning to homeownership, but should you? This article will help you make the decision about whether to buy this year or next.
There are certain important factors that you’ll need to take into consideration and compare today against 2021. For instance, the interest rate, the cost of homes, and mortgage payments are just a few of the crucial factors that must be considered before making that decision. Plus, there is the coronavirus pandemic to deal with.
Here are some things to consider when deciding between buying a Washington or Oregon home today versus on 2021.
The interest rate that you pay on your mortgage will make a huge difference in how much you pay for your mortgage overall. Over the life of your loan, you not only will be paying off the principal amount you borrowed (base don the purchase price of the home), but the interest portion attached to it.
Obviously, the lower the interest rate, the less you’ll pay in your mortgage over the long run. That’s why it’s so important to be able to lock in at the lowest rate possible. Before you decide whether to buy this year or next, consider the rate.
Right now, the interest rate is 3.21% for a 30-year fixed-rate mortgage. That’s near historical lows. While rates have been on a downward trend for the past year-and-a-half, it’s not as likely that the rate will be this low next year.
Rates have already hit all-time lows three times this year, and today’s rate is not that far off. At a rate of 3.21%, you may find that today is the perfect time to lock in at a low rate and potentially save tens of thousands of dollars over the life of your loan.
The price that you will pay for a home today versus next year will also play a role in when to buy a home. The average price for a home in the US is currently $248,000. Over the past 12 months, prices across the nation have risen 4.1%, which means buyers are paying that much more for a home than they did last year.
While it’s tough to tell where prices will be next year, it’s safe to say that home prices will follow an upward trend over time, despite the odd blip here and there. So, waiting to buy a home when prices may likely increase means you may be paying more for a home later down the line than you would this year.
Of course, we don’t have a crystal ball, but if the coronavirus pandemic diminishes soon, that can be good for real estate. And many buyers that may have decided to sit the game out for a few months because of the health crisis may swarm the market as things clear up, building demand and therefore pushing prices up.
Your Current Finances
It’s important to take a look at your finances to make sure you are ready to buy. For starters, you will have to come up with a down payment for a home, which could be anywhere between 3% to 20% or more of the purchase price of the home, depending on the type of mortgage you take out and your current financial status.
Further, you’ll have to assess your current income and debts to make sure you have more than enough money coming in to cover the cost of your mortgage payments. Your lender will be looking at this closely before approving you for a mortgage. The question is, are you financially stable right now? Or do you need more time to get your finances in order? Ask yourself this question before you decide to buy a Washington or Oregon home today or next year.
At the end of the day, how much will it cost you to buy your dream home today versus tomorrow? Even just one year can make a big difference in the overall cost, so it’s important for you to crunch the numbers and get familiar with the market right now versus what it is expected to be next year in order for you to make the right decision about whether to wait or make the move today.
Have Questions About Mortgages?
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.