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Carol Sawdey
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Was Waiting To Buy The Right Choice In 2014?

graphThere are lots of people out there who debated purchasing a home last year who ultimately did not.  There was a lot of talk about rising mortgage rates and home prices adding a sense of urgency to the decision but lets take a quick look to see if waiting was the right choice.

What Happened In 2014

Freddie Mac reports that the 30 year fixed rate was 4.53% on January 2, 2014.  As of December 31, 2014 they show it at 3.87%.

The Home Price index has home prices appreciating 4.8% during the same period.  So let’s do some quick math and see what the numbers turn out to be.

Assume a $500,000 home at the beginning of the year and with the 4.8% appreciation in price that makes it a $524,000 home at the end of the year.

Principal and Interest:
$500,000 @ 4.53% = $2542.35       $524,000 @ 3.87% = $2462.54

That’s a savings of $79.81 monthly or $957.72 a year by having waited, looking at just the monthly principal and interest payment.  However, you can’t forget about that additional $24,000 the home costs, as well as the additional down payment which for 20% down would be $4,800.  Staying in the home the U.S. average of 5 years, the savings is $4788.60.  Wow, that’s just about a wash.  A lucky wash in our opinion…

The Bottom Line

We don’t expect to see this kind of scenario in 2015.  Home prices are expected to rise an average of another 4%.  Interest rates are expected to rise by a full percentage point to near 5%.  Therefore, we recommend people in a position to be able to buy a home before these predictions become reality contact us to start the process.  We have the knowledge and expertise to go over the numbers with you and see if making a move makes sense for you.  No hassle, no obligation – we’re here to help!

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Reviews

5SR Matt

“ When we started to seriously look for houses to meet our family's needs, we chose our neighborhood expert, Carol Sawdey. It was a perfect fit for us since we wanted to stay close to our current house/school. As a neighborhood resident, Carol knows the... (more)

5tonikmcgrath

I highly recommend Carol to anyone I know looking for a realtor! We put our home on the market at a time of year that wasn’t ideal, but we sold the house the first weekend and received over our asking price, which was for more than any equivalent house in... (more)

5greglbarnes

I want to thank Carol so much for all of her help and assistance throughout the home searching and purchasing process. I very much appreciated her always keeping me up to date on the latest home listings even while I was living 2,500 miles away and didn’t... (more)

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