I hear so often that people are waiting to buy a home because they want to save more down payment! It’s such a valid reason to wait….but how realistic is it. How much are you planning on saving and will it actually save you money when buying a home? In this current market in the Eastside and Seattle areas, with home prices increasing monthly and the looming threat of interest rates increasing, waiting to save a few thousand dollars won’t make a huge dent.
For every 1% interest rates go up, you lose buying power by 10%. If you were qualified to buy a $550,000 home — with an interest rate increase of 1% that home now will cost $665,000.
The link below is a great article about how many years it will take to save 10% down payment. In Washington it’s over 5 years! If you rent, just think of how much you would have saved in rent. Well over 10% down on a $550,000 home.