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Should you buy a house now or wait?

A little history

Real estate prices have soared over the last few years. Just in San Diego alone, there has been an average of $40,000 (8%) increase in home sale prices. Meaning if you were interested in buying a home, you would have been better off doing it last year. According to Zillow, housing inventory declined 10.5% in the 12 months ending in November, meaning this year is going to be even more competitive. So not only are houses going to continue to increase in price, there is lower home inventory which means higher buyer competition. Even though we have all this data, some people are still wondering the following.

What if the market crashes again?

After experiencing the crash of 2008, it is understable why no one wants to go through that again. So while we cannot accurately predict whether the market will crash, we can say that things are different this time. Most importantly, the guidelines for financing are stricter than ever. Meaning loans are not being handed out to just anyone. This extra barrier immediately eliminates the biggest contributor that lead to the crash of 2008.

Do I really need a house?

We all need a place to live and having a house not only fulfills that need but it does something an apartment simply can’t, build your wealth. Any amount of money you pour into your apartment will not increase your wealth at all. When you buy a home on the other hand, your money can be directly used towards upgrading your home and therefore increasing its resale value.

What If want to move?

Just because you bought a house, does not mean you are forced to live there for the rest of your life. If for example you lived in your house for 2 years and then decided to move elsewhere for a new job opportunity, you can. You even have a couple of options: Renting the house or selling. If you choose to rent the house, you have now turned your house into a recurring source of income. If you choose to sell it, all the improvements you have made to the house along with good market conditions may make your house even more valuable than when you first bought it.

Does waiting have a huge impact?

Let’s do the math and find out! To start out, let’s assume you take out a $500K loan with an APR of 4.5% and with the expectation that the interest rate will go up to 5% by the end of the year.


If you buy now with a $500k loan at 4.5% on a 30 year fixed you will pay $412,032 in interest over the term of the loan. If you wait until the end of the year and pay 5% interest you will pay $466,278 in interest over the term of the loan. That is a difference of $54,246! Although it may seem enticing to wait, under these conditions it is clear that waiting will cost you more in the long run.

Where do I go from here?

The best place to start is by taking a rent vs buy analysis. As the name implies, this will help you determine wheter or not renting or buying is best for you. While there are a ton of online calculators you can use, we recommend you talk to a loan officer over the phone or in person to go over your specific situation and what will be best for you. Your new home is a major decision and having an experienced and certified loan officer give you professional financial advice is always the safest way to go. If you’re interested you can contact our loan officer Carl Spiteri by scheduling an appointment online or calling him directly at (619) 544-6444

Special Thanks

We would like to thank our friend CC Summerfield for helping us write this blog post. We particularly love her Facebook videos and we know you will learn a ton by watching them. You can learn more about CC by visiting her Facebook, Twitter, Linkedin and Youtube. (CalBRE#: 01373421, Coldwell Banker CalBRE# – 00616212)

If you have any additional questions, we recommend you talk to our loan officer Carl Spiteri (NMLS #286890) by scheduling an appointment online or calling him directly at (619) 544-6444