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A Home’s Cost vs. Price Explained

A Home’s Cost vs. Price Explained

We have often talked about the difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned about price but instead about the ‘long term cost’ of the home. Let us explain.

Recently, we reported that a nationwide panel of over one hundred economists, real estate experts and investment & market strategists projected that home values would appreciate by approximately 8% from now to the end of 2015.

Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30 year fixed mortgage rate will be 5.7% by the end of next year.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Cost-of-Waiting0407

Agents who desire an even deeper understanding of how interest rates and home prices will dramatically impact this spring buyers’ season, should reserve a seat for our FREE webinar, “Spring Ahead in 2014: KCM’s Action Plan for Dominating this Buyers’ Season,” on Thursday, April 17th at 2PM ET.

We at The KCM Crew believe every family should feel confident when buying & selling a home. KCM helps real estate professionals reach these families & enables the agent to simply & effectively explain a complex housing market. Take a 14-Day Free Trial of our monthly membership to see how we can help you!
1 reply
  1. Michaela Phillips
    Michaela Phillips says:

    This information is so relevant in today’s market. Good agents and mortgage professionals need to be taking the time to explain the true affects of higher home costs and mortgage rates down the road. Well informed buyers turn into a great referral source.

    Reply

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