When to buy a home” is a decision buyers make that has a direct impact on their mortgage payments and how much house they can afford.  Buyers often delay home purchases for a variety of reasons.  Some hope home prices will drop, interest rates will decrease, and sometimes they just want to wait to build up just a little bigger financial cushion.  Regardless of the reason, delaying a home purchase can cost you money.  The general trend over the history of real estate in the United States is that prices continue to rise.  Yes, there are fluctuations, but the general trend is upward

In Venice Florida, we have enjoyed beautiful sunny days with a temperate climate and a mild winter.  Meanwhile, our northern friends have endured brutally cold winters well below the freezing mark with complete road, work, and school shut downs.  Some simply say they have had enough.  As a result, inventory continues to remain low and will probably decline as the market receives increasing pressure from northern buyers.

In addition, Janet Yellen, the Federal Reserve Chair has indicated the labor market is improving and the Fed’s have improving confidence in the economy. They have indicated the possibility of an increase in interest rates by policymakers as early as mid-year.  So what does that mean for home buyers?

A typical home purchase involving financing takes approximately 45 days to close the transaction once the home is under contract.  It takes time to find the right home as well.  So start to finish, a reasonable expectation may be two and a half months for a buyer just starting the process.  If interest rates go up a single point while a home buyer is sitting on the fence trying to decide what to do, their purchasing power dwindles and their new house payment will go up.

For Example, If a buyer financed a $200,000 home purchase for 30 years, with 20 percent down payment, and their interest rate jumped a single point from 4 to 5 percent.  Their payments would go up $95. per month and the total cost over the lifetime of the loan would be $34,218.  That is a very good reason to get busy and start working with a REALTOR® before rates increase.

Contact the skilled REALTORS® with Gulf Shores Realty at 941-488-6644 or visit https://gulfshoresrealty.com/ to start the search for your home now.