Here’s why you shouldn’t wait to make your real estate move.
Many are wondering whether it’s the right time to buy a home or make a move, especially when rates are seemingly high. Understanding the dynamics behind these rates and their impact on property prices will offer valuable insights into making informed decisions.
In 1998-1999, rates were around 7%, even reaching 8.65% in 2000. Surprisingly, homes were cheaper back then compared to today. Property values have soared over 220% from 2000 to now, largely due to increased money circulation—as more money is printed, its value decreases, leading to increased property values over time.
Furthermore, when interest rates rise, sellers often drop their prices to attract buyers, reducing competition and making it a favorable moment for potential buyers. Also, it is worth noting that historically, real estate has consistently increased in value due to the greater circulation of money. Therefore, when rates are high, it often signals an advantageous time for buyers.
Currently, rates are relatively low, around 7.39%. Previously, a good rate was considered to be 9%. Even at seven and a half or seven and a quarter percent, these rates are still favorable. Moreover, if rates drop in the future, refinancing remains an option to lower payments. Conversely, with a fixed-rate mortgage, one is shielded from potential rate hikes.
However, waiting for rates to decrease before making a move poses risks. If rates continue to rise and the housing market becomes less affordable, waiting might lead to being priced out of homeownership, potentially forcing individuals into prolonged high-cost renting situations.
Moreover, those who currently own homes and wait for rates to drop before selling might face challenges. If rates fall due to a struggling economy, their home’s value might decrease, impacting their equity and potentially prolonging their stay in the same house.
There’s no certainty about what the future holds. The key is making a move now, choosing a home you envision yourself in for the coming years. If prices rise, you benefit. If they fall, at least you’re not stuck in a home you didn’t prefer.
Ultimately, it’s essential to consider your circumstances, the housing market trends, and your long-term plans. If you want to delve deeper into this discussion or analyze the numbers, feel free to call or email. I look forward to hearing from you.