Hello & Welcome Back to #FabulousFriday! Buy now or wait? That is the question we are often asked as real estate professionals. Home prices have been skyrocketing recently, and the Federal Reserve’s work to tame inflation sent mortgage rates soaring, too. The combination has led many would-be buyers to pick the “wait” side of the equation.
The volume of existing home sales was down 3.3 percent from February 2023 to February 2024, according to the National Association of Realtors (NAR). And, according to the Fannie Mae Home Purchase Sentiment Index released in March 2024, an overwhelming 81 percent of consumers believe it’s a bad time to buy a house.
In general, if you can answer yes to these 3 questions, now is a good time to buy:
1) Do you have excellent credit? The best deals are available to those with a high credit score. If you have demonstrated that you are a low risk buyer with a history of on time payments, you will be in line for the best mortgage rates most lenders offer.
2) Have you saved enough for a down payment? In addition to paying your bills on time, you should be sitting on a sizable chunk of change for a down payment. The more you can pay upfront, the less you’ll have to borrow (and so the less interest you’ll have to pay). Make sure you’ll have plenty left over, too: Lenders like to see additional cash reserves that can provide a cushion if something unexpected happens.
3) Are you planning to stay in the home for a while? It’s wise to be reasonably certain that you won’t move again anytime soon — or that you’ll be financially stable enough to hold onto the property to be able to rent it out.
In fact, the best time to buy a house is now, according to "Shark Tank" shark and star, Barbara Corcoran. In her recent Instagram Reel, Corcoran stressed that what makes now the best time to buy a house is because “everyone is scared.”
If you wait until everyone else buys or when interest rates go down, you should be cautious. Lower interest rates present a few issues for buyers. The first is that there will be no houses available to buy and the second is that that house prices keep going up. In fact, Corcoron predicts house prices will escalate another 10-15% percent higher when the interest rates drop.
Remember what you buy now doesn't have to be your forever home. The home you buy now can be traded up later and you will have gained the needed equity to start your investment in real estate.
If you have questions and want to learn more, contact us today. We can arrange for a private buyer consultation to discuss the pros and cons of the buying process. See you soon! Warmly, Susan