Additionally, interest rates are still near record lows, but they’ll almost certainly rise over time, which means a higher monthly mortgage payment. In the next 12 months, the Mortgage Bankers Association expects rates to rise to 4.4 percent. Over a longer period, they are likely to be even higher, considering a 20-year U.S. average mortgage rate of about 6.5 percent.
The rationale for moving up now is fairly simple. A $100,000 home that appreciates 10 percent in one year would net a home seller an additional $10,000. But if that owner hopes to move into a home worth $200,000, the increased cost of the home one year from now, at the same 10 percent, would be $20,000 more.
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