--- title: Why Buying Now Can Save You Money Despite High Home Prices description: With interest rates currently at historic lows, find out why now is an awesome time to purchase a home and how you can save money despite high home prices. --- [![logo-steel](https://blog.steelesandiegohomes.com/hubfs/Group%20336.svg)](https://steelesandiegohomes.com/) [![logo-steel](https://blog.steelesandiegohomes.com/hubfs/Group%20336.svg)](https://steelesandiegohomes.com/) - [About Us](https://steelesandiegohomes.com/about-us/) - [Sell](https://steelesandiegohomes.com/sell/) - [Buy](https://steelesandiegohomes.com/buy/) - [Relocate](https://steelesandiegohomes.com/relocate/) - [Listings](https://steelesandiegohomes.com/listings/) - [Blog](https://blog.steelesandiegohomes.com/) - [Resources+](https://steelesandiegohomes.com/resources/) - [+1 (619) 8874429](tel:+16198874429) - [![Contact Us](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/2756673/1eb87d79-e947-4154-ae61-e5ca91077e96.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/2756673/1eb87d79-e947-4154-ae61-e5ca91077e96) - [+1 (619) 8874429](tel:+16198874429) - [![Contact Us](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/2756673/1eb87d79-e947-4154-ae61-e5ca91077e96.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/2756673/1eb87d79-e947-4154-ae61-e5ca91077e96) ![default-image](https://blog.steelesandiegohomes.com/hubfs/image%2044.png) ## Why Buying Now Can Save You Money Despite High Home Prices # **Why Buying Now Can Save You Money Despite High Home Prices** While working with many buyers in today’s aggressive San Diego market, we’ve been hearing one major concern a lot lately.  In fact, it’s been a question we’ve been asked so many times in the recent weeks, that we thought it necessary to write a blog post to help clear up any confusion for those of you asking yourself the same thing! “In a hot seller’s market, like the one we’re seeing now in San Diego, with home prices continually on the rise, **is now good time to buy**?  Or should we be waiting for home prices to come down and the market to *cool off*?”  How many of you are asking yourselves this same question as you get frustrated looking for a home in a high-demand market?  Not to worry, you aren’t alone!  And we’re here to help you understand why *now* is an awesome time to buy! Interest rates are currently at historic lows and while it’s all projection and speculation, many of the financial gurus in the industry are forecasting that interest rates are going to increase after the election. Just how low are interest rates? Check out the graph below and I think you will be surprised. The Fed has met numerous times over the last few years to discuss raising interest rates, but after discussions each time, they have yet to really make any substantial change, leaving the rates as-is and setting a meeting to reconvene at a later date. It’s hard to say if interest rates will in fact go up after the 2016 presidential election, but if they do, there are many people who believe that it will drive home prices down.  The thought process here is that if interest rates increase, the pool of buyers that are able to afford a home will decrease. The decrease in demand will then drive down home prices.  This is what many buyers are waiting for in their home buying process - the market to “cool down”, so they can take advantage of those lower home prices.   Not only are decreasing home values a big “what if," like I said earlier, most financial gurus are not projecting the market to come down in price until interest rates go up.  Even then, there is no guarantee that the home prices will decrease.  Many buyers don’t keep the “big picture” in mind, but are very much fixated on that “price tag”. The amount that the typical home buyer would pay towards their home over the life of a 30-year fixed rate loan can be determined a few different ways. You can use one of the many available mortgage calculators online, an excel/ spreadsheet formula, or the easiest and most accurate way, talking to your lender.  But I don't want you to have to go through all that work so here is a quick example of how interest rates can have a dramatic affect on the cost of your home. Example 1: If you have a $500,000 30-year fixed rate loan at 4%, you’d end up paying $859,347.53 over the lifetime of the loan. Example 2: If interest rates go up, and home prices drop, and you are now able to get the same home in example 1 with a $400,000 30-year fixed rate loan, but interest rates are now at 7%, you end up paying $958,035.59 over the life of the loan. Even though the home is $100,000 less in example 2, over the life of the loan, you end up paying almost $100,000 more because of a higher interest rate.  Note that a rate of 7% used in this example is still very low by historical standards. In 1980 the average mortgage interest rate was around 15%! Something to also keep in mind as you estimate costs, is that during this period of waiting for the market to cool down, you may also be paying an average of $1,500/month in rent, for a total of $18,000/year. So with each month/ year that you are paying rent, you are putting that money in your landlord's pocket as opposed to putting it towards building the equity in your own home. So, what do you think?  We’ll let you be the judge.  With historically low interest rates, is now a good time for you to buy? ;)  We’re here to help you out whenever you’re ready to get the ball rolling! [![The Home Buyer's Checklist](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/2756673/4eaf22d8-d45d-4fa0-8273-6a91ccf04ece.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/2756673/4eaf22d8-d45d-4fa0-8273-6a91ccf04ece) --- The above real estate information on **Why Buying Now Can Save You Money Despite High Home Prices** was provided by John and Melissa Steele. John and Melissa can be reached at [steelesandiegohomes@gmail.com](mailto:steelesandiegohomes@gmail.com) or by phone at 619-887-4429. Considering buying or selling a home? John and Melissa of Steele San Diego Homes have a passion for Real Estate and would love to share their expertise with you! Steele San Diego Homes services all of San Diego county and also works with out of area clients to connect them with a strong local agent. Whether you’re interested in buying, selling, investing, or just want to learn more, John and Melissa Steele are here to help you. 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