Is It Smart to Buy a Home in 2021?

Dated: March 3 2021

Views: 73

How Smart Is It to Buy a Home Today? | MyKCM

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.

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:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

From a purely financial standpoint, if the answer is ‘yes’ to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,’ you should definitely buy now.

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 rise and home values are expected to appreciate rather nicely.

What does this mean to you?

Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:

  • The experts are right - mortgage rates will be 3.18% at the end of the year
  • The experts are right - home values will appreciate by 5.9%
  • You want to buy a home valued at $350,000 today
  • You decide on a 10% down payment

How Smart Is It to Buy a Home Today? | MyKCMHere’s the financial impact of waiting:

  • You pay an extra $20,650 for the house
  • You need an additional $2,065 for a down payment
  • You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
  • You don’t gain the $20,650 increase in wealth through equity build-up

Bottom Line

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.

#hybridrealestate #hybridpcs #thehybridexperience

Latest Blog Posts

Important Fall 2021 Distinction: Homes Are Less Affordable, Not Unaffordable

It’s impossible to research the subject of buying a home without coming across a headline declaring that the fall in home affordability is a crisis. However, when we add context to the most

Read More

Homebuyer Tips for Finding the Best One

Some HighlightsThe best advice carries across multiple areas of life. When it comes to homebuying, a few simple tips can help you stay on track.Because of increased demand, you’ll

Read More

What Do Experts Say the Future Holds for Home Prices?

If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising home prices. And while this increase in home values is great news for sellers, you

Read More

Sellers: Your House Could Be an Oasis for Buyers Seeking More Options in Fall 2021

Sellers have a great opportunity this season as buyer demand still heavily outweighs the current supply of homes for sale. According to the National Association of Realtors (NAR), today

Read More