When shopping for a big purchase, the line that “it never hurts to wait” often makes sense. But that’s only because by looking around more, you might find a better deal. Which is why, with interest rates expected to rise over the next few years and home-buying demand still heathy, following that advice could be costly in today’s real estate market.
To put a price tag on the possible cost of waiting to buy a home, real estate information website Zillow Inc. assumed that the rate on a 30-year fixed-rate mortgage would rise 1 percentage point. It calculated how that higher rate -- which would be about 5.1 percent -- would affect a buyer's monthly mortgage payments. Zillow applied that rate to the median home price in 35 metropolitan areas, assuming a 20 percent down payment and a 30-year fixed-rate mortgage. (More assumptions that went into the calculations are here.)