The Cost of Waiting

Homebuyers may be opting to wait until more inventory hits the market but as the months tick on, that plan may in fact end up costing them money.

With interest rates and home prices headed up, and the supply of homes for sale remaining tight, there most likely won't be a decrease in demand that people seem to think is headed their way.

For example, let's say you're purchasing a home for around $650,000, which is near the average price of a home for the Denver area. Putting 10% down and paying closing fees will cost you about $70,000.  This means with a 30-year conventional loan of $585,000 at an interest rate of  4.5 percent, your monthly mortgage payment would be just about $3,000.

In a conservative market, which we have not been experiencing for quite some time, waiting 6 months could cost an additional $104 per month/$1247 annually and waiting a year could cost you an additional $347 per month/$4368 annually.

Also, during those years that you are postponing purchasing a home, you are also delaying paying down your mortgage.

If you have an existing home to sell and are waiting for the market to soften in order to purchase a new home, your existing home will most likely continue to gain in value but so will your next dream home. You also run the risk of exposing yourself to the anticipated interest rate hikes that are planned to take place throughout the remainder of the year.