Should You Buy a Home Now or Wait for Rates To Fall?

By Kyle Koller

Producing Branch Manager of UMortgage West - The #1 Producing Team at UMortgage

If you’re like a lot of would-be homebuyers, you’re feeling the pressure from higher interest rates. While many experts predicted that rates would fall in the spring, a healthy job market and steady inflation have caused the Federal Reserve to keep rates higher for the time being. With no end in sight to higher rates, many buyers are asking the question: “Should I just buy now or wait until rates fall to make a move?” In my opinion, buyers should move sooner rather than later, and there are three key reasons why:

1. There’s less competition right now. You can take advantage of all the other buyers sitting on the sidelines, but only if you act soon. Currently, there are a ton of buyers just waiting to get into the market once rates hit around the 6% range. Once that happens, you have to compete with them for good homes, and you’ll likely have to pay a premium to get the property you want. If you act now, you can get into that nicer home at a lower price. Then, you can simply refinance when rates eventually fall.

2. Sellers are offering concessions. Due to lower demand, a lot of sellers are willing to offer nice concessions to sweeten the deal for good buyers. You can get your closing costs covered, your interest rate lowered, have a more favorable closing period, and much more. However, as soon as rates fall and a flood of buyers enters the market, this will no longer be the case.

3. Rates won’t fall anytime soon. Many experts believed that rates would fall very soon, but this hasn’t turned out to be the case. Due to our strong economy, demand for debt, high employment, and steady inflation, rates could stay this high for much longer than people initially anticipated. The truth is that from a historical perspective, current interest rates aren’t that high; we’ve just gotten used to low rates as being the norm. Barring an unforeseen economic crisis, rates will stay relatively similar to where they are now for the foreseeable future. Because of this, it makes more sense to get into a home now and start building equity on your new property sooner rather than later.

I know higher rates can be a major sticking point for a lot of buyers, but you don’t have to navigate the mortgage process alone. Just call or email me with any questions; I might even be able to help you get a lower rate than you thought possible. I look forward to hearing from you!