The combination of higher interest rates and home prices have made some prospective homebuyers hesitate to look at buying now. But does that make sense? Some buyers think that they should wait for interest rates to drop before buying. However many experts advise against this.
Many people that bought homes in the last couple of years realized how tight the housing inventory has been. This has continued through this year, even with higher interest rates. Maybe partly because of the rates. Many homeowners that might have sold have interest rates in the 3-4% range and don’t want to give that up. That has hurt the housing inventory.
So what happens when interest rates do drop? There will be more people looking for homes and that will cause a higher demand for homes. If the housing inventory increases even a little, home prices will still go up due to demand. There will be more multiple offer scenarios and we may see more of a seller’s market than it is now. More than likely you will pay more for the home if you wait than if you buy now.
For those that buy now, inventory is still low but you can find a home that has been on the market for a little while – that can give you a better opportunity to get seller paid closing costs if need be or maybe even negotiate the price a bit.
Interest rates may be higher now, but when they do drop, you will have the opportunity to refinance your mortgage. That will help you save money at that time plus you have gained equity in your home.
The newest saying in the real estate market has become “you marry the house, date the rate”! For many it may make more sense to buy now and refinance later if/when interest rates do drop!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
