Thinking to purchase a new home but a bit scared of the current interest rates? Here are a few things to consider:
- Some buyers were waiting for home pricing to drop, we’re not seeing much of that although the market has slowed a bit. We never have enough homes for sale to meet the demand here in the Greater Portland Metro area…. so pricing is holding pretty steady.
- Some buyers are waiting for rates to drop, which some economists do think will happen. But here’s the deal – they might not. So 7-8% now, may look good if they go up to 10% later…. and rates going up greater reduces your buying power . If you qualify for a $650,000 home at 7.5% interest rate…. if it hit 8.5% you may be looking at $600,000 homes instead. For the same payment. How frustrating.
- Let’s say the rates do drop, then all those buyers who are waiting will be jumping into the market. And again, we have little inventory. Now as a buyer you are pressured to make very quick decisions, and most likely will be competing with multiple other offers. Having to pay $25,000-$50,000 over asking price for a home at a lower rate, doesn’t save you any money vrs paying asking price now at a higher rate and potentially refinancing later if and when hopefully rates do drop.
One great strategy for buying now would be to have your agent negoiate a rate buy down from the seller of your potential home. Best of all worlds! Get the better rate, get your home while there isn’t a feeding frenzy, have a moment to be sure you are buying the right home for you. Depending upon your life circumstances and goals, it could be an exceptional time to buy your next home.
Happy to help you strategize! If you are considering a purchase in the next two years I’d be honored to help. Let’s talk about your unique situation and some options.