Are you looking to buy a home but think you should wait until the market calms down?

In this episode of Give, Work, Play, I’m talking about the cost of waiting to buy a house. We’ll explore the top three reasons you shouldn’t wait to become a homeowner so you can decide what your best option is.

The Cost Of Waiting

What really is the cost of waiting to buy a home? We often hear about people wanting to wait to buy until the market calms down, interest rates go down, or home prices go down. We also hear that there’s a housing bubble that's going to burst. Despite all of these concerns, here are three reasons why you should not wait to buy a house in this market.

Unknown Costs

The number one reason why you should not wait to buy a house right now is that there are going to be unknown costs depending on when you wait to buy your home. These hard money costs include rising interest rates, closing costs, additional buyer strategies, premium gas, and more.

These things are going to be more expensive as we head into the end of the year—and there are still some unknowns about them. Appreciation is still continuing to go up along with interest rates. If you don't buy today and lock your loan, we might be looking at a more expensive house at a higher interest rate in six months.

Losing Equity

Unknown costs lead to our second reason not to wait: housing will be more expensive. If you choose not to buy now, the same home you’re looking at may be more expensive later on. For example, a home that would cost you $350,000 now might be selling for $375,000 in six months to a year.

Not only are you now paying $25,000 more for that home, but you’ve also missed the critical number two cost of waiting: equity. Your equity is wealth-building, and depreciation is a part of your overall financial strategy. This fact is something that gets overlooked when we talk about the cost of waiting.

It's more than just the dollars and cents; you’ll be paying more dollars and more cents for a higher-priced house at a potentially higher rate, but you're going to be missing out on the equity that you would have otherwise.

Higher Monthly Payment

The number three reason why you shouldn't wait to buy a house right now is the one that everyone forgets to talk about until it's too late—or until they're already feeling the cost of sacrifice. If you buy a house 6-12 months from now, your payment could be $200 a month higher than what you wanted to spend.

If that happens, what are you going to have to sacrifice? Is it dinner out at your favorite spot? Is it saving for Christmas presents or a vacation? Is it a sports league? We have seen interest rates go up, and we have seen appreciation of homes go up. The longer you wait, the more expensive your housing payment is going to be over time.

Renting VS Buying

Everybody has to live somewhere. A lot of people that we're working with in the Northern Virginia area are renting. What is the difference between buying versus renting right now? The first is stability. If you enter into a fixed-rate mortgage, you know what your housing expense is going to be this year, next year, and conceivably the next 360 months even if you don't refinance. This allows you to plan.

If you’re renting, however, rent is increasing upwards of 22% year over year in some markets. You have no control over that. All of us are making a mortgage payment; it’s just that some of us are making our landlord's mortgage payments. If you have the opportunity to buy versus rent, remember that renting is an unknown for your future. You're not building the equity for your own future; you're building for someone else.

When you think you're finally ready to stick your toes in the water of being a homeowner, it's probably going to cost you more in the long run. Renting is probably going to cost more than owning a home in many markets as well. You may actually be able to have your own home for less than you would be paying in rent. There's going to be a cost associated with either renting or buying.

Start On Your Home Search

I hope this gave you a good idea of why it’s better not to wait to buy a house. Visit our youtube channel for more local videos and tips on home buying & selling in the Northern VA area.