The past year has brought incredible opportunities to those wishing to purchase a new home! And those that did purchase are happy that average US Home Prices have increased over 12.1% – from June 2012 to June 2013.
Middle Tennessee is no exception to rising home values. But those that have not purchased a new home do not need to feel like the train has left the station!
NOW is still a great time to purchase a new home in Middle Tennessee, but continuing to wait is certain to cost you a bit more. Let’s do the math!
Let’s say that you have determined a $1,400 monthly home payment meets your needs. This figure includes principal, interest, property taxes, insurance, and mortgage insurance premium.
At current interest rates on a FHA Loan, that $1,400 monthly payment will allow you to purchase a $200,000 home in Middle Tennessee. (If you use the THDA Great Start Program for first time buyers, the State of Tennessee will even pay your required 3.5% down payment!)
This would be the payment scenario of you purchase today. But, things change. Costs can increase. Interest Rates can go up.
Let’s assume interest rates go up 1% over the next year. You still cannot go over $1,400 for a monthly payment. You are now looking at $185,000 homes instead of $200,000.
Now, let’s assume that home prices continue to rise at the same rate as the past year, 12.1%. The $200,000 home you can buy now would be approximately $224,000 by waiting, over $160 per month more if interest rates stay the same!
Let’s go one step further and assume both happen – prices rise 12.1% AND interest rates rise by 1%. The monthly payment on the $200,000 home that meets your needs TODAY could be $1,700 per month if you continue to wait.
BUT DON’T BE SCARED…..
There is never a bad time to purchase a new home that you can afford. However, certain times are better than others. NOW is one of those times!
You will find new Ole South homes all over Middle Tennessee in Nashville, Murfreesboro, Smyrna, Spring Hill, Gallatin, and Clarksville. Visit www.olesouth.com to learn more!