As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home.
The
Mortgage Bankers Association (MBA), the
National Association of Realtors,
Fannie Mae and
Freddie Mac all projected that mortgage interest rates will increase by
about three-quarters of a percentage point over the next twelve months.
According to
CoreLogic’s most recent
Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.
What Does This Mean as a Buyer?
Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.2% predicted by
CoreLogic over the next twelve months:
