Skip to Main Content
Online Access

Online Access

BankSouth offers immediate and easy access to your mobile and online banking. You can also apply for and review your ReadyLoan mortgage application.

Learn More

Mortgage

Mortgage

For over ten years, BankSouth has helped thousands of families finance their homes.  We know how daunting this may be, but we take the worry and hassle out of the process.

Learn MoreStart Your Application

The Cost of Waiting to Buy a Home

Jun 17, 2020 Mortgage Speak

Waiting to Buy Can Decrease Your Purchase Power

In this uncertain real estate market, many buyers may be playing the waiting game when it comes to purchasing a home. There are advantages and disadvantages to this strategy. Waiting could mean you have more time to save for a larger down payment. Waiting could also mean you end up paying more interest, and your rent payment is not building you any equity. Let’s break down the cost of waiting to buy a home.

Interest Rates

Interest rates are at historic lows! Lower interest rates mean lower payments. This has prompted a surge in mortgage refinances. In addition, serious buyers are moving forward with their home search amid these uncertain economic times.

Home Prices

In the past few years, home prices have been on a steady incline as inventory has been dwindling. Utilizing the “wait and see” approach to house hunting may not work in your favor. Waiting even a few months to purchase could decrease your purchasing power.

If you are looking to sell your home and purchase another, you also may be inclined to wait to see how much your home will appreciate. Something to consider is a higher selling price, the number of buyers that can afford your house potentially decreases. Also, as your current home’s value increases, so does the price of the houses you are looking to buy.

“As your current home’s value increases, so does the price of the houses you’re looking to buy.”

Inventory

Along with interest rates, inventory was at a two-year low in January 2020, according to Housing Wire. Atlanta Realtors Association president, Jennifer Pino, told USA Today the Atlanta market was at a two-month supply level before the pandemic started. With low supply, demand typically goes up along with the prices.

What the Numbers Show

As rates increase, your purchasing power decreases. For every .50% increase in interest rates, your purchasing power decreases by 6%!

In the example below, we look at a home with a sales price of $400,000. With a 10% down payment, an interest rate of 3%, APR of 3.43% on a 30-year fixed loan, the monthly payment is $1518.00. If you wait to buy a home, you risk the rates increasing .50%. If that happens, your purchase power goes down almost $25,000.

What is your cost to wait?

Interested to see what your cost of waiting to buy a home will be? Contact a local mortgage banker today to run the numbers for you. You could also use this rent vs. buy calculator.

If you enjoyed this article, please follow BankSouth Mortgage on Facebook, Instagram, LinkedIn, Twitter, and read our reviews.

Recent Posts

View our latest news and get the latest industry updates on our blog.

Apply for up to $10,000 of Homeownership Set-Aside funds to help purchase a home. The recent announcement of an additional $5 Million of Homeownership Set-aside funds offered by the FHLB Atlanta will allow more individuals and families the ability to...
voted Savannah's best community bank and financial institution in 2022
For Immediate Release: September 1, 2023 Media Contact: Neil Hediger, VP - Director of Marketing and Digital Banking [email protected] SAVANNAH, GA September 1, 2022 - Today, for the third year in a row, BankSouth's Savannah branch has been voted Best...
teaching gen z about money management
We all hope to provide younger generations with the education and skills they'll need in life, and financial literacy is a part of this. There are things we can do to teach concepts related to money - modeling and discussing...