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TheStreet Open House

Your Cost for Waiting to Buy a Home: $46,000 in Mortgage Interest

NEW YORK ( TheStreet) -- The dodo bird.

The chances of the Chicago Cubs winning the World Series.

Mortgage rates below 4%.

All of the above are either extinct already or heading in that direction. (But we'd love to see the Cubs prove us wrong.)

For homebuyers, it's the last item that sticks in their craw. By waiting until this summer to buy a home, fence-sitters may have added tens of thousands of dollars to their home price.

That's because mortgage rates are moving upward, and at a fairly aggressive pace.

According to the BankingMyWay Weekly Mortgage Rate Tracker, 30-year fixed rate mortgages shot up again last week to 4.63% from 4.46%. In May and June, mortgages rates shot to 4.6% from around 3.5% in the past 60 days, to the highest levels since 2011, costing new homebuyers a fortune in the process.

How much are they potentially losing? Let's let the BankingMyWay Mortgage Calculator do the math:

Before May 1

Mortgage amount: $200,000
Term: 30-years, fixed rate mortgage
Interest rate: 3.50%
Monthly payment: $898.09
Total payments: $323,311.97
Total interest: $123,311.97

Since July 10

Mortgage amount: $200,000
Term: 30 years, fixed-rate mortgage
Interest rate: 4.6%
Monthly payment: $1,025.29
Total payments: $369,103.49
Total interest: $169,103.49

That's an extra $127 per month in mortgage payments, and approximately another $46,000 in mortgage interest payments over the course of 30 years -- all by waiting 70 days to buy a new home.

The trend is not just bad news for new homebuyers; it's a negative trend for homeowners looking to sell, as the rise in mortgage rates slows down the housing market's recent momentum.

That hasn't happened yet, but if mortgage rates continue to rise -- and many economists think they will -- fewer buyers may want to wade into a market roiling with high interest rates.

Lawrence Yun, the National Association of Realtor's chief economist, says skyrocketing rates may return buyers to the dreaded "fence sitter" mindset.

"Even with limited choices, it appears some of the rise in contract signings we're seeing could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher," he says. "This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand."

That's positive for homeowners in general, as Yun expects the average U.S. home price to appreciate by 10% this year.

But if rates rise and homebuyers are glued to that fence, that leaves fewer buyers on the market and could well force sellers to once again lower prices.

Since few owners want to take that approach, fewer homes may be on the market, leading to reduced inventories and subsequent headaches for buyers, sellers and real estate professionals alike.

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