Home Prices Are Rising. Here's Why Now Is the Right Time to Buy

"To be, or not to be?”

This is the question famously asked by Shakespeare’s Hamlet, as he thinks over all of his choices and opportunities in a particularly fraught moment. It’s one of the most famous quotes in human history, but we think it’s time for a little bit of a revamp.

Specifically, we know that prospective homebuyers around the country are asking themselves a question more along the lines of:

“To wait, or not to wait?”

Let’s see if we can help set your mind at ease!

Why Now Is the Right Time to Buy a Home

Hamlet may pace back and forth muttering to himself to find answers. But here at Real Group RE? We prefer cold, hard facts. And many of the signs available say that it’s better to buy now, rather than waiting until next year.

Why act now? Well, it really comes down to two big factors - home prices, and interest rates.

Rising Prices

First up, home prices. By most metrics, home prices are projected to rise year-over-year for the foreseeable future. 

The Pulsenomics Home Price Expectation Survey - a quarterly survey of economists, real estate experts, and market strategists - found that 99% of home experts anticipated prices to appreciate within 12 months. Of that group, 71% believe that prices will appreciate by 3-5.99%. But a staggering 21.6% of experts believe that prices will appreciate by 6% or more.

Why do rising prices matter? Well, for one thing, consider your budget. The higher that home prices climb, the less purchasing power you have in the short term. To borrow a phrase that a lot of agents use, you’ll get “less house for your money” - or “less bang for your buck” - the longer that you wait to start looking.

At the same time, remember that a home is an investment. The more that home prices continue to appreciate, the more equity that you will be able to build. If you’re in a position to start now, why wait until prices go up - when you could be in a position to benefit from those rising prices.

Need a little motivation? Check out this chart, courtesy of Keeping Current Matters:

Here’s what you’re looking at. The graph above demonstrates how much wealth you may be able to build buying now, given the projected rise in home prices. The graph factors in a 5% rise in sales prices year-to-year, on a $250,000 house. Within five years, those homebuyers may see their wealth grow by nearly $50,000. Even in one year, those homebuyers will earn more than $12,000 in equity.

Rising Interest Rates

Another factor worth considering? Interest rates.

Generally, though rates have been climbing, they still sit near historic lows. However, when it comes to mortgage rates, it is broadly advisable to act when you know what’s going to affect your rate - rather than waiting for an uncertain future.

After all, even a small change in rates can affect your monthly payments a great deal. For some indication of just how much, check out the graph below, courtesy of Keeping Current Matters:

[Graph here]

As you can see, given rising home prices coupled with a realistic rise in rates, homebuyers could end up paying significantly more for a home a year from now - not only in terms of down payment, but monthly, annually, and over the life of their loan.

Ready to Take Action?

For Hamlet, one of the greatest tragedies of all was an inability to take action. The same goes for homebuyers!

If buying a home is in your plans for this year, it may be better to act sooner, rather than later. Act earlier, and you could start building significant wealth sooner - while also saving thousands of dollars over the term of your loan.

Curious about how to get started with a home search in Chicagoland? Want to talk neighborhood market stats? Need a trusted advisor? Whatever you’re looking for, Real Group RE is here to help make buying your next home as easy as can be. Drop us a line today to get the conversation going!

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