The real estate community is often criticized for seeming to have a Pollyanna attitude about the housing market. Many believe that the industry’s current call to 'buy now’ is nothing more than a scare tactic with the sole purpose of creating more commissions. Let’s look at whether or not that was good advice over the last year.
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. According to the most recent Case-Shiller Home Pricing Index, home values have risen over 10% in the last year. If we look at Freddie Mac’s Weekly Primary Mortgage Market Survey®, the 30 year mortgage rate has increased from 3.67% to 3.91% during that same period.
The table below compares the cost of buying the average price home in the Portland Tri-County area in May 2012 with May 2013. The key number is in the lower right: $116. That's the increase in monthly payment given these increases in prices and mortgage rates.
|Purchase Price||20% down||Loan||Rate||Payment|
What that means for most people is that, unless your income has increased significantly (and you've found another $3,400 for the down payment), you'll be buying "less house" than last year.
Do you want to risk that happening again in the next year, or is now the right time to look at buying? I work with a couple of mortgage pros, and between us we'll work very hard to find you the right home with the right financing.
Call, text or email and let's get started!