Let's Dive Deeper on Whether you Should Wait to Buy

By Gray Group

We know Real Estate. We make finding your perfect home in the right location easy and fun!

Are you considering purchasing a house in the near future? Some homebuyers are putting their searches on hold because of all the talk about a potential interest rate drop in the future. While that sounds like common sense, you might want to reconsider and look at the other side of the situation. While lower interest rates can increase your purchasing power by 10%, they are a double-edged sword.

Currently, there’s a shortage of houses on the market and a high demand for them. Many homebuyers are waiting and observing the market. The moment interest rates drop, there will be more competition, leading to bidding wars and higher home prices. At the same time, staying a renter means you’re missing out on building equity and the potential tax benefits of homeownership.

You might ask, “Is it really better for me to buy a house now than later?“ To answer that, let’s consider a scenario where you want to buy a $600,000 home today with a 10% down payment, where you need to pay a $4,631 monthly mortgage. Within two years, you could potentially refinance to a lower rate, reducing your payment while still gaining equity and enjoying tax benefits.

To add to that, home values have been appreciating. Looking at last year’s data alone, sellers saw an average gain of 4.1%. If that trend continues, you could gain roughly $48,000 in appreciation in two years, with a potential reduction in your monthly payment through refinancing.

If you choose to wait for the rates to drop, you’ll be missing out on equity gains and will face a more competitive market with potentially higher prices. The market is unpredictable, but with the current market conditions, now is an excellent time to buy before the rush hits.

Another thing is: don’t rely on online mortgage calculators. Instead, talk to a qualified loan officer for an accurate assessment of your situation and the best loan options. This also ensures that you get the most out of your home purchase.

If you’re a buyer who’s been considering waiting and would like to discuss more options, send me a message by phone or email. I can connect you with professionals who know the market and can help you find the perfect home.