If you’re thinking about buying a new house or moving (perhaps for a new nurse practitioner business opportunity), then you may want to run the numbers first. 

Ever since inflation started to rear its ugly head in 2022, mortgage interest rates have been skyrocketing to new highs. This is causing the cost of buying a home to become way more than what it’s been for the past ten years. 

How much worse? To illustrate, let’s look at how much interest rates changed throughout 2022 for a conventional 30-year mortgage:

• Beginning of 2022 = 2.67%
• End of 2022 = 6.42%

Image source: FRED

If you consider that the median price of a house is currently $467,700, here’s how much different your monthly payments would have been:

• Beginning of 2022 = $1,889.58 
• End of 2022 = $2,931.62
• Difference = $1,042.03 

These numbers become even more painful when you look at what the total interest cost would be over the life of the loan.

• Beginning of 2022 = $212,550
• End of 2022 = $587,683

That’s a staggering difference of $375,133!

What’s worse is that this isn’t the end. According to the Fed, they plan to raise the federal funds rate to 5.75%. That means we’ve still got at least another 0.75% left to go. By that point, who knows where interest rates will be …

So what can you do about all of this? The good news is that interest rates rarely ever stay high forever. Many economists are predicting that the Fed may pivot as soon as 2024 or 2025. Though home prices may stay elevated, at least we can look forward to the cost of borrowing money becoming cheaper than they are now. 

Therefore, if you don’t have to move, then stay put. However, if you do, then don’t overextend yourself. Buy as little house as you need and don’t borrow more money than you can afford. That will give you the capital you need to make another move later on when mortgage rates become more reasonable.