Waiting for home prices to rise before you sell your current home and buy a move-up home could be a financial mistake.

Although waiting a few years to sell a home will likely mean a higher price, the price of the new home will increase as well. Financially, it makes more sense to capture today’s prices on the more expensive home.

Additionally, interest rates are still very low, but will almost certainly rise over time, which means a higher monthly mortgage payment, points out, Glenn Kelman, CEO of Redfin.

“The price of the move-up home will increase faster than the price of the place you’re leaving behind,” Kelman said. “But waiting until interest rates rise is what can really cost move-up buyers, because most economists believe that rates at some point will go back to historical norms, well above 5%. This means that most move-up buyers are likely to be trading in a low-interest loan on the old place for a higher-interest loan on the new one. In this scenario, the only winner is the lender.”

In the next 12 months, the Mortgage Bankers Association expects rates to rise to 4.4%. Over a longer period, they are likely to be even higher, considering a 20-year average of about 6.5%.

We are in the “perfect storm” for home owners looking to move-up!  Lower rates and good pricing is not often enjoyed at the same time.  Looking to find out what your home is worth?  Let me know.