If clients are looking to invest in a better residence or a vacation home, now is the time.

They’ll probably have to take a lower-than-desired price if they are selling, but clients can get similarly favorable terms on the trade-up home.

“Waiting until interest rates rise is what can really cost move-up buyers,” Glenn Kelman, CEO of Seattle-based real estate broker Redfin, said in a statement. “Most economists believe that rates at some point will go back to historical norms, well above 5%. This means that most move-up buyers are likely to be trading in a low-interest loan on the old place for a higher-interest loan on the new one. In this scenario, the only winner is the lender.”

Redfin provides the example of a homeowner who sells a house now for $250,000, pays off a $200,000 loan, and buys a $340,000 home with a $34,000 down payment. Assuming a 3.75% interest rate on a 30-year mortgage, the monthly payment would be $1,417.

On the other hand, suppose this homeowner waits for five years to move up in the housing market. Assuming home prices increase by 3.5% a year, in line with the Case-Shiller projection, the seller would get $300,000 , up from $250,000. But the replacement home, now selling for $340,000, is expected to sell for $404,000.

Moreover, interest rates are projected to be at least 4.4% then, while 6.5% is a more typical rate for the past 20 years. Redfin assumes that a buyer in 2018 would make a $95,000 down payment on the new home and have a monthly payment between $1,547 (at a 4.4% mortgage rate) and $1,953 (6.5% rate).  In this example, trading up in 2013 saves anywhere from $130 to $536 a month, compared with trading up in 2018.

What’s more, a client acting in 2013 would move into the more expensive home five years earlier.

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