I just had a difficult conversation with a buyer who put off buying a home last year hoping that prices would be down this year. In their opinion Austin was in a bubble for the past several years. Unfortunately for that buyer, Austin’s home prices are up 40+% from last year.
This dramatic increase has been fueled by lack of inventory and strong buyer demand. Other facts include the Pandemic affect of more employers allowing works to work remotely. Since buyers who work remotely can live anywhere, many are choosing Austin and it’s surrounding suburbs: Cedar Park, Leander, Liberty Hill, Plfugerville, Round Rock, and Georgetown.
So, if you are still thinking about waiting to buy a home in Austin here’s two questions you’ll want to ask yourself:
1. Will home prices next year be higher or lower? Freddie Mac predicts U.S. Homes will rise 5.3%. Fannie Mae predicts 5.1% and the Mortgage Bankers Association predicts 8.4%. And then there’s Zillow who in July of 2021 predicted that home prices will rise 24% in Austin. Waiting doesn’t make sense if price is a concern for you.
Take a $400,000 home for example. If prices rise only 8.4% the price of that home next year will be $433, 600. That’s a big chunk of money. Your down payment is going to go up considerably. Waiting to buy just doesn’t make sense.
2. Will mortgage rates be higher or lower? Right now you can get a 30 Conventional loan for around 2.85%. But what about next year. Freddie Mac predicts rates will rise to 3.8%. Fannie Mae predicts 3.2% and the Mortgage Bankers Association predicts 4.2%. That’s an average of 3.7%. That will make a big difference in your house payment.
That could add almost $5,000 annually to your house payment. Waiting to buy is costly.
In the video above I go over all this in detail with an example of how your mortgage payment will be affected.
When you’re ready to buy or sell just give me a call. 512-516-4666.
