The Return Most Homebuyers Never Calculate
- Paul Cantor
- 9 hours ago
- 2 min read
One of the most common questions I hear is:
“Should I wait?”
It’s a fair question.
Mortgage rates remain higher than many of us became accustomed to a few years ago, and affordability continues to be a challenge for many buyers.
Sometimes waiting is absolutely the right decision.
But here’s what I’ve noticed…. When people think about waiting, they usually calculate what they might save. Very few calculate what waiting might cost.
Looking Beyond the Mortgage Rate
In the Richmond market, we’re continuing to see steady activity. Well-priced homes continue to attract buyers, and while purchasers generally have more choices than they did a couple of years ago, desirable homes are still moving quickly.
That’s why I encourage clients to think beyond one variable—mortgage rates—and look at the entire financial picture.
The Return Most Homebuyers Never Calculate
Let’s use a simple example:
Suppose someone purchases a $400,000 home with 5% down.
Their initial cash investment is $20,000.
Appreciates at an average of 4% annually.
Five years later, that home would be worth approximately $487,000. That’s nearly $87,000 in appreciation.
Here’s the part many people never calculate.
The appreciation occurred on a $400,000 asset, not just the $20,000 they invested.
That appreciation alone is more than four times their original cash investment.
Even with 10% down ($40,000), the appreciation would still be more than double the original investment.
And that’s before considering five years of mortgage principal reduction.
Of course, this is a simplified illustration—not a prediction. Home values can rise, flatten, or decline, and homeownership includes costs such as interest, taxes, insurance, maintenance, and transaction expenses.
The Other Cost We Often Forget
Now let’s look at the other side of the equation.
Suppose someone decides to continue renting instead, paying $2,000 per month, with rent increasing 5% each year.
Year | Monthly Rent | Annual Rent |
1 | $2,000 | $24,000 |
2 | $2,100 | $25,200 |
3 | $2,205 | $26,460 |
4 | $2,315 | $27,783 |
5 | $2,431 | $29,172 |
Total rent paid over five years: approximately $132,615.
Renting isn’t wrong. Waiting isn’t always wrong. Buying isn’t always right.
The point is this:
Every housing decision has a cost.
Buying has costs.
Renting has costs.
Waiting has costs.
The best decision comes from understanding all of those costs—not just today’s mortgage rate.
Bottom Line
No one knows exactly where mortgage rates or home prices will be next year.
What we can do is evaluate the full picture.
Sometimes the biggest financial mistake isn’t making the wrong move.
It’s never calculating the opportunity cost of making no move at all.
Helping people make better decisions means looking at both sides of the equation before making one of life’s biggest financial decisions.
Have a great week,
Paul Cantor
Cantor Team Home Loans
TrustMor Mortgage Company
NMLS #49523
Helping people make better decisions.
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