Jeff Duncan Real Estate
Jeff Duncan
(360) 441-2121(360) 441-2121

Don’t Wait until Spring to Buy

There are practical reasons that people generally like to shop for homes in the spring and summer (have you been outside lately? It’s COLD!).  But, buyers that shop in the winter have some distinct advantages this year.

 

Mortgage Interest Rates are Expected to Increase

Your mortgage payment is driven by two main factors: Your purchase price/loan amount and your interest rate. As expected, the Federal Reserve increased the prime rate in December, and is expected to increase it again at least once this year.  Mortgage rates have gone up marginally in response. Furthermore, experts in the mortgage industry are predicting that interest rates will be at 4.5% – 5.0% by year end.

 

Look at this example to see how delaying your purchase impacts your monthly payment.  Based on a home purchase of $350,000 with a 20% down payment (a loan amount of $280,000) at today’s interest rate of 4.25%, your monthly principal and interest payment would be $1377.43.

 

Interest Rate         Principal & Interest Payment       Monthly Difference

 

4.5%                                         $1418.72                                              $41.29

 

5.0%                                         $1503.10                                              $125.67

 

 

Think of what you could use that extra $125 for every month!

 

 

Prices Will Continue to Rise

We’ve been in a seller’s market for at least the past 36 months and home prices in Bellingham have increased over 30% during that time.  All indications point to the trend of low inventory & increasing home prices continuing in 2018. Waiting for spring or summer will only result in you spending more for your home than if you buy now.

 

 

Sellers who List Homes for Sale in Winter are Motivated

Who wants to move in the cold, rainy winter in Whatcom County?  No one. But sometimes people don’t have much of a choice, so they list when they need to. In the winter this means keeping the house clean and show ready when shoes are wet and having to clear out on short notice into the cold when someone wants to look at it. Who would choose that unless they were motivated to sell?  Sellers will be excited at the prospect of buyers who are braving the cold and wet to see their home (especially if they’ve been on the market for a month or two!) Let’s put on our winter coats and get to work!

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