The weather has turned cold and so has many a buyer's enthusiasm for purchasing Washington DC real estate in 2018. But before buyers put their searches on hold, they might want to think about these important points:
Washington DC home prices continue to escalate and experts predict they'll rise another 3.80% to 4.2% during 2019. Those familiar with DC know that’s just a baseline prediction because bidding wars are still prevalent and the home type du jour, trending price points and neighborhoods will all experience much greater increases.
The Domino Effect
Along with the increased price of a home, down payment amounts, closing costs and mortgage payments also rise;
Higher prices can also push buyers into Jumbo loans ($679,650+), which carry yet higher interest rates;
Higher prices means paying more interest over the life of your loan and having less buying power when purchasing.
Rates are predicted to rise by an additional quarter point by the end of 2018 and three more times in 2019. Today’s rate of 4.85% percent can become 5.85% by this time next year. No big deal? Well, you might consider that a one point increase can cost borrowers up to 23% more in interest over the life of a typical 30 year mortgage. For loans of $400k and higher, that extra interest could add up to more than $100k over the life of the loan.
Let’s do all the math. Read the full post