Thursday, November 10, 2022 / by Sonya Reiselt
After a scorching real estate market during the pandemic, rising interest rates have definitely cooled the chaos. But does that mean bad news for buyers? Not necessarily, here’s why.
When the housing market heated up, many would-be homeowners found themselves in a position of being unable to purchase due to cash offers and bidding wars that went sky-high, often thousands of dollars above the asking price and almost all contingencies waived. With interest rates rising, home prices are now edging down and correcting in most markets.
In a recent Bloomberg article (October 2022) by Teresa titled “Looking to Buy a House? It’s Not the Worst Time to Buy” she states “Buying an asset when the price is falling is generally a good thing. Buying a home now when mortgage rates are high and housing prices are falling means as mortgage rates stabilize or even drop, your house value will more likely inflate than if prices were rapidly increasing and mortgage rates were increasing. Rising mortgage interest rates and a potential recession may seem like bad news, but these trends could benefit would-be home buyers by cooling demand and dropping prices further, especially if the buyers are confident, they won’t lose their jobs and income.” She further explained “Of course, a would-be home buyer must consider other important criteria besides housing prices before buying a house. Other important decision factors include having at least 20% for a down payment; whether you will live in the property for more than five years; and whether your monthly payment will be lower than .”
While many may consider purchasing a home while inflation & interest rates are higher is less than ideal, it could be a perfect time if you can afford to do so. You’ll avoid the bidding wars that kept so many buyers out of the market before and you can refinance when the interest rates come back down…which some experts predict will start happening sometime in 2023.
If you’re considering a home purchase, please reach out and schedule a time with me to discuss your needs, options, and homes available to you.
Sonya Reiselt- 843-321-2158