This is a YouTube video titled "Buy Now or Wait? 🤔 - June 2023" containing a financial advice talk from June 24, 2023. The speaker discusses the current mortgage rate environment, comparing the benefits of buying a home now versus waiting for potentially lower mortgage rates, using numerical examples to illustrate the financial impact of each choice.
With the current mortgage rate environment, it's understandable that home buyers might be a little bit more hesitant on is it a good time to buy? And there's many signs showing that in the next year, mortgage rates could drop a decent amount, maybe up to 1% in the next 12 months. So let's play this scenario out. Let's say you're getting a 6.5% rate today on a $400,000 loan, and you're contemplating, do I want to wait another year to drop my rate 1% before I buy the house? Well, that difference of 6.5 and 5.5 is $257 a month on the $400,000 loan amount. So over the course of a year, that would be a savings of 3,000 doll payments. However, home values are starting to go back up, and a pretty conservative estimate says that home values should probably increase about 6% in the next 12 months. So that $400,000 home will have gained $24,000 of value while you're waiting to save $3,000 the next year in total by payments. And on top of that, by just simply making the monthly payments, even at that 6.5% rate, you would have paid $4,000 into your mortgage as well. So it went up 24,000 in value. You added $4,000 in additional value by your monthly payments. So you're ahead $28,000 if you bought now and $3,000 by waiting for another year. Another way to look at the numbers, but I think it shows buying now is the right call.
