Here’s what buyers need to know about our current housing market.
“Is now a good time to buy real estate?” People have been asking me this all the time, but is this the right question to ask? Another way of thinking about this is by asking, “Will tomorrow be a better time to purchase real estate?” In my opinion, it will only get harder to purchase property in the future, and today I want to discuss why.
First, if you’re not a cash buyer, interest rates are going to affect you. Yes, interest rates are higher than they were in 2020 and 2021, but they’re still historically low. A global pandemic created a pretty abnormal market, but now things are adjusting, and interest rates are rising.
If you lock your rate now and the rates go up, you can keep your lower rate. If they go down, you can refinance. There are many headlines about higher interest rates, but the important thing is your financing; what really matters is your monthly payment. Fortunately, there are many new mortgage programs that will help you lower your payment, such as interest rate buydowns or adjustable-rate mortgages.
Here’s one way to think about our current market: Would you rather pay tens of thousands of dollars over the list price while competing with other buyers, or would you rather pay a slightly higher monthly amount keeping the home inspection in place and the appraisal contingency? The truth is that rates are higher now, but demand is way down. This means you can assert yourself in negotiations and secure favorable terms with your seller.
The truth is that sellers are now more negotiable. You can probably purchase a home for under its list price, and you might be able to get your seller to help pay for an interest rate buydown. Plus, there are more homes to choose from. So there’s no rush like there was just six months ago.
Finally, we are dealing with unprecedented inflation in our country like we haven’t seen in 75 years. There’s no doubt that this will affect our home prices. Over time, housing always appreciates, so the sooner you own property, the sooner you’ll be able to begin building equity.
If you have questions about any of these thoughts or buying a home, please call or email me. I am always here to help!