Are you on the fence about owning a home? It may be better to buy now than wait.
The nation’s median home value is expected to grow by $6,275 to $208,975 just one year from today, according to Zillow, adding on to the already considerable funds homebuyers need now to own a home. The average homebuyer, in fact, has to add $105 more each month to their down payment savings (assuming a 20 percent down payment on a median-priced home) over the next year, or $1,260 total, to keep up with the rise in values.
In other words: It costs more to hold off.
“Sky-high rents and rising home prices are putting first-time buyers in a bit of a catch-22,” says Dr. Svenja Gudell, chief economist at Zillow. “Buying now with a low down payment can be riskier, and the offer may not be considered as competitive by the seller; however, a renter who saves for another year to reach a larger down payment may find that the home they love today is outside their budget a year from now. For those considering buying in the next year, getting into the market today may make more financial sense than they think.”
Homebuyers in hotter markets have to contribute even more to their savings if they wait. In San Jose, Calif., the average homebuyer has to add $599 more each month to their savings to purchase a median-priced home ($1,088,434) with 20 percent down ($1,088,434); in Seattle, Wash., the average homebuyer has to add $394 more each month to their savings to purchase a median-priced home ($479,451) with 20 percent down.
In other markets:
San Diego, Calif.
Additional Down Payment Savings Per Month: $267
Expected Median Home Value (Sept. 2018): $569,906
Riverside, Calif.
Additional Down Payment Savings Per Month: $266
Expected Median Home Value (Sept. 2018): $348,949
Sacramento, Calif.
Additional Down Payment Savings Per Month: $246
Expected Median Home Value (Sept. 2018): $388,336
Las Vegas, Nev.
Additional Down Payment Savings Per Month: $229
Expected Median Home Value (Sept. 2018): $247,331
Portland, Ore.
Additional Down Payment Savings Per Month: $227
Expected Median Home Value (Sept. 2018): $383,348
Boston, Mass.
Additional Down Payment Savings Per Month: $206
Expected Median Home Value (Sept. 2018): $443,047
San Francisco, Calif.
Additional Down Payment Savings Per Month: $192
Expected Median Home Value (Sept. 2018): $876,938
Denver, Colo.
Additional Down Payment Savings Per Month: $181
Expected Median Home Value (Sept. 2018): $383,667
For more information, please visit www.zillow.com.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.
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