A Home’s Cost vs. Price Explained

KCM

We have often talked about the difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned about price but instead about the ‘long term cost’ of the home. Let us explain.  Recently, we reported that a nationwide panel of over one hundred economists, real estate experts and investment & market strategists projected that home values would appreciate by approximately 8% from now to the end of 2015.  Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30 year fixed mortgage rate will be 5.7% by the end of next year.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Cost-of-Waiting0407

I’ve seen a recent uptick in purchase mortgage applications as we enter the spring season.  Smart home buyers who understand how increasing rates will impact their buying power are chosing to make their move sooner rather than later.  If you or someone you know is thinking about buying a primary residence, investment property or a vacation home. feel free to contact me for a Fast and Free home loan pre-approval.  Ask about our 14 day Close Guarantee Program!

Thanks to our friends at KCM for this blog post.

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  • About Michelle’s Blog

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    Michelle Coolidge-Tondu is currently serving her mortgage clients as a Vice President, Sr. Loan Originator and Certified Underwriter with over 25 years in the mortgage industry. Her passion for her profession has resulted in her achieving the ranking of Top 100 Originator in the Nation, among numerous industry achievement awards and recognitions. One of the attributing factors to Michelle's success is her dedication to remaining your trusted source for mortgage and real estate information, as well as fast and accurate pre-approvals. As Michelle reads program guidelines, updates, various blogs, and other related information, she passes on the most important information to you through this site. This site is designed to help educate home buyers, home refinancers and real estate agents on the current happening of the mortgage and real estate industry.

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