Although waiting a few years to sell a home will likely mean a higher
sales price, the cost of a bigger new home will increase as well,
according to an analysis by Redfin. Financially, it makes more sense to
capture today’s relatively low prices on the more expensive home.
Additionally, interest rates are still near record lows, but they’ll
almost certainly rise over time, which means a higher monthly mortgage
payment. In the next 12 months, the Mortgage Bankers Association expects
rates to rise to 4.4 percent. Over a longer period, they are likely to
be even higher, considering a 20-year U.S. average mortgage rate of
about 6.5 percent.
The rationale for moving up now is fairly simple. A $100,000 home that
appreciates 10 percent in one year would net a home seller an additional
$10,000. But if that owner hopes to move into a home worth $200,000,
the increased cost of the home one year from now, at the same 10
percent, would be $20,000 more.
© 2013 Florida Realtors®
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