How Smart Is It to Buy a Home Today?

<article class="post-2040 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2040"><span class="entry-date">March 3, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">How Smart Is It to Buy a Home Today?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=How+Smart+Is+It+to+Buy+a+Home+Today%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhow-smart-is-it-to-buy-a-home-today%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="How Smart Is It to Buy a Home Today? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132634/20210303-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132634/20210303-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132634/20210303-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>Whether you’re buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.<span id="more-43948"></span></p>
<p>However, there’s one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:</p>
<ol>
<li>Do I think home values will be higher a year from now?</li>
<li>Do I think mortgage rates will be higher a year from now?</li>
</ol>
<p>From a purely financial standpoint, if the answer is ‘yes’ to <strong>either</strong> <strong>question</strong>, you should strongly consider buying now. If the answer to <strong>both questions</strong> is ‘yes,’ you should definitely buy now.</p>
<p>Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.’ Mortgage rates are expected to <a href="https://www.simplifyingthemarket.com/2021/02/18/will-low-mortgage-rates-continue-through-2021/?a=712984-fa409495d5d70154d03a25e81e9540e2">rise</a> and home values are expected to <a href="https://www.simplifyingthemarket.com/2021/03/02/home-prices-what-happened-in-2020-what-will-happen-this-year/?a=712984-fa409495d5d70154d03a25e81e9540e2">appreciate</a> rather nicely.</p>
<h4><strong>What does this mean to you?</strong></h4>
<p>Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:</p>
<ul>
<li>The experts are right – mortgage rates will be 3.18% at the end of the year</li>
<li>The experts are right – home values will appreciate by 5.9%</li>
<li>You want to buy a home valued at $350,000 today</li>
<li>You decide on a 10% down payment</li>
</ul>
<p><a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132635/20210303-MEM-Eng-1.png"><img alt="How Smart Is It to Buy a Home Today? | Simplifying The Market" class="aligncenter wp-image-43950" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132635/20210303-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132635/20210303-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/03/02132635/20210303-MEM-Eng-1-400×300.png 400w" width="650"/></a>Here’s the financial impact of waiting:</p>
<ul>
<li>You pay an extra $20,650 for the house</li>
<li>You need an additional $2,065 for a down payment</li>
<li>You pay an extra $116/month in your mortgage payment ($1,392 additional per year)</li>
<li>You don’t gain the $20,650 increase in wealth through equity build-up</li>
</ul>
<h3><strong>Bottom Line</strong></h3>
<p>There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year.</p>
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