Should I Buy Now When Mortgage Rates Are Higher?

hi are you thinking of buying a home but waiting for rates to drop it's a common strategy among potential home buyers but it might not always be the best approach here's why buying a home when interest rates are a little bit higher can actually be a Savvy decision first there's less competition in the market when interest rates rise many potential buyers op to sit on the sidelines waiting for rates to fall this reduction in competition can be a significant Advantage for those who decide to buy fewer buyers means less contracts less bidding wars giving you a better chance to secure your dream home at a more reasonable price when rates drop everyone is in the market right and this pushes a lot of buyers out of the market even though the rates are low because there's so much competition often you'll see bidding wars where people people are paying 50 to $100,000 over the asking price just to get their offer accepted just like we saw during historical low rates during covid right remember this over asking price also has to be paid in cash so it's not really financially smart to pay significantly more than the asking price higher interest rates can also lead to stabilization or even a decline in home prices sell may be more willing to negotiate and accept offers below their asking price and this can be really beneficial to you as a buyer and right now we're even seeing sellers who have a little bit softening markets and they're coming down off their initial listing prices they're offering better negotiation terms they're giving concessions to buyers that can be used to pay closing costs fees even buy down your interest rate this makes it a great time for anybody thinking about buying right now another great opportunity if you're purchasing now is you can start building Equity sooner over time the value of your home is going to increase and you'll benefit from the appreciation the average home today even in this market is still appreciating at 3.91% a year in our local market meaning if you buy today 1 year from today that house at A5 million doar is going to gain almost $20,000 in equity otherwise if you sit on the sidelines and you wait to buy that house it's going to cost you an additional $20,000 to purchase it instead of you making the $20,000 and in 3 years that house is going to be worth over $600,000 so sitting on the fence waiting for the rates to drop you're actually losing equity and the prices are rising another thing that happens when the rates drop is the prices increase right so rates come down prices go up more people come to the market making more competition which drives home prices higher think back to co when those prices skyrocketed because those rates were so low and everybody in the whole world was in the market remember low rates high prices so and the last thing is if you buy today and the rates are a little bit higher you can always refinance so interest rates always fluctuate right you can start with a higher rate but there's always the potential to refinance your mortgage when the rates drop in the future and we can lower your monthly payments and overall costs without you needing to delay your home ownership Journey right now if you buy now and the rates drop Will refinance you but you've earned the appreciation already and have the equity that you can take advantage of lower rate without fighting against multiple people in a bidding more that could go crazy and paying more money over the asking price so that's a win-win right also renting can be a little bit unpredictable so with landlords increasing rents annually buying a home even at a higher interest rate today provide stabil stability fix rate mortgages ensure that your monthly payment payment remains consistent making it easier to budget and to plan for the future and long-term buying can actually be cheaper than renting if you look at a 5-year plan on how much you spend on rent versus how much you spend on owning your own home the numbers when you look at the appreciation you gain you're going to come out way ahead on the owning side you're going to actually gain on a half million doll house $96,000 in a positive cash flow if you buy instead of renting and paying someone else's mortgage wow right so here's the most important reason this is the most important what I say to all my people you can't beat the market you can't time the market if you could you'd be a gazillionaire already right you wouldn't even need to be here watching me but it's just like having kids they're never perfect you just can't time it but if you are in the right place at the right time in the right neighborhood with the great job your kids have their friends and you have yours and your around family or whatever your reason is or your why for wanting to be where you are the town the school district the near the beach whatever floats your boat and you can afford to buy right now it's time to buy because it's the right time for you and that's all about living life today we can always refinance your house but if you find that dream home and and you can afford it woohoo it's time to go if you have any more questions or need any more information about buying your dream home or helping you get financed I'm Stacy slamon mortgage team and not only am I a 30-year veteran of the mortgage industry a third generation Air Force vet a pro morgage basketball wife but I'm your neighbor I live right in Vieira right down the street from you my kids go to school with your kids and we're all about family and walking you through the process we have helped thousands of families get through this process and this journey by holding their hand and educating them and I'm a certified mortgage planner and I'm all about helping you gain wealth and understand the market I can't wait to welcome you to the slim DK mortgage team family talk to you soon bye-bye [Music]