As most potential home buyers know, home prices are up and rising, interest rates are now increasing from historic lows, and inventory is still in woefully short supply. And all of this makes many people think that they should wait to buy – at least, wait till prices go down and there are more homes on the market. But should they? The answer most certainly is NO, and although there are some similarities, there are many differences between now and when the housing bubble burst around 2006. So let’s take a look at 3 ways waiting to buy an Orlando house is costing you.
1. Prices Will Continue to Rise
Waiting to buy an Orlando house is costing you, first of all, because the prices are still going up – and that trend doesn’t look to change anytime soon. In fact, most economists and Real Estate websites predict that home values are expected to increase anywhere from 2 to 9% over the next year.
Higher prices mean that you’ll pay more for a home if you wait, but it also means a larger down payment. And if you can’t pay 20 % down (and many people can’t), you’ll also have the added cost of private mortgage insurance. If you don’t know what private mortgage insurance means then we can set up a consultation to get you familiar with all home buying terms.
But waiting to buy in hopes that prices will go down is costing you in another way as well. You will be missing out on the investment opportunity. Waiting will mean not taking advantage of appreciation. If you buy now and prices continue to rise, your home will soon be worth more than you paid for it. We are firm believers that Real Estate is not only one of the most secure investments, it also offers tremendous opportunity for passive wealth building.
To find out exactly what prices are doing in your market, you can consult an Orlando agent. Just call (407) 974-7977 to discover more.
2. Interest Rates Are Going Up
Not only are prices still rising, but mortgage interest rates are beginning to do the same. Not long ago (in part in response to the pandemic) interest rates reached historic lows of around 3%, giving buyers more purchasing power and increasing demand. Now, though, interest rates are creeping up – which means that waiting to buy will cost you many thousands more over the life of your loan.
Suppose, for example, you buy a $325,000 home. If you wait to buy when the interest rate increases just half a percentage point, that home becomes a $350,025 home. And your monthly mortgage payment could conceivably increase by $200.
3. Inventory Will Remain Low
Another reason why waiting to buy an Orlando house will cost you is that inventory looks to remain low for the foreseeable future. That lack of supply will mean keen buyer competition, which will likely continue to drive home prices up.
There are three main reasons for the paucity of for-sale homes on the market . . .
Builders aren’t building enough new homes. Owing to several factors – such as soaring material costs, supply chain problems, a skilled labor shortage, and tighter lending – there just isn’t enough new construction to keep up with demand. And this comes at a time when there is more demand for new homes than formerly.
Fewer people are selling existing homes, which make up the bulk of the market. Some studies have found over 75% of homeowners are opting to renovate rather than move to a newer home. One factor in this is that if people sell, they’ll have to pay more for the new home because prices are going up.
Also, Orlando and Florida in general are practically on a different Real Estate path than the rest of the country. Florida along with Texas and Arizona were some of the hardest hit states during the 2006 bubble, because of that they have seen some of the sharpest increases in home values over the last decade. Due to this reason along with no state tax and great weather make Florida and Orlando in particular a great place to live and an even better place to invest.
This housing shortage means that buyers will be competing fiercely for the available homes. The most likely result is that waiting to buy will cost you.
Stop Waiting to Buy
Waiting to buy just doesn’t seem like a sound financial move right now. But with the low inventory and keen competition, buying is getting tougher. That’s why it’s so important to work with an experienced Orlando agent, one who can help you find what you’re looking for and help you get a better deal. When you’re ready to stop waiting to buy an Orlando house and avoid what it is costing you, contact us today at (407) 974-7977.