If your mortgage rate is 3%, you probably don’t want to let that go. “Why would I give that up?” may be the thought that keeps you from moving, even if you’ve thought about it.
However, you might not be aware that when you ask that question, you are putting your own needs second. The mortgage rate is the main reason why most people don’t move. They move since they need to or want to. Let’s ask this instead:
What are the chances you’ll still be in your current house 5 years from now?
Take a moment to think about your life. Think about what will happen in the next few years. Are you going to have more children? Are your grown kids getting ready to move out? Are you planning to retire soon? Are you already full to the brim?
If you love where you are and nothing is going to change, it might make sense to stay put. But if you think there’s even a small chance you might be moving, even if it’s not right away, you should think about your schedule.
Because one or two years can make a big difference in how much your next home costs.
What the Experts Say About Home Prices over the Next 5 Years
Fannie Mae asks more than 100 experts in the housing market every three months to say where they think prices for homes will go. And everyone agrees on this. The graph below shows that home prices are likely to keep going up until at least 2029:
The predictions don’t call for big jumps every year, but it’s still an increase. In some markets, prices may stay the same, growth may slow down, or there may even be small drops in the short term. But take a closer look. Prices almost always go up over time. And the expected rise, no matter how small, will add up quickly over the next 5 years.
This is an example. Let’s say you want to buy a house for about $400,000 when you move. Professionals say that if you wait to move for 5 years, it might cost almost $80,000 more than it does now (see graph below):
That means the house you want will cost more the longer you wait.
It might be a good idea to really think about your schedule if you know you’re going to move soon. You don’t need to move right now. But if you’re worried about money, you might still want to talk about your options before prices go up even more. Because rates aren’t really going to go down that much. And if you’re still hoping that 3% rates will come back, experts agree that it’s not going to happen.
So, “why would I move?” isn’t really the question. It’s “when should I?” because waiting might not be the best way to save money once you see the whole picture. And that’s the best thing you can say to your trusted agent right now.
Bottom Line
It’s smart to keep your mortgage rate low until it starts getting in the way of your plans.
You should look at the numbers now if you think you might be moving, even if it’s not for a few years. This way, you can make plans.