Just because a saying is trite, doesn’t mean it shouldn’t be considered. The one that comes to mind is, “Marry the house and date the rate”. Simply put, commit to buying a home you love and keeping it for an extended period of time. Be open to refinancing it as rates become more attractive. Here’s why I think this is good advice:
There is currently unusually low inventory on the market. Baby boomers are unwilling to sell their homes and down-size because they are paying on a mortgage that may have an interest rate of less than 4%. Why would these folks give up that rate and buy a smaller home at 7% where their payment is about the same?
Less competition – there are also fewer buyers right now – many buyers can’t qualify and many more are waited for rates to drop.
A great way to think about this current market is the example of a $500,000 home in Anytown, USA. A payment in 2021 with a 3% interest rate would cost a consumer $2,108. Right now, with rates hovering around 7%, that same home at the same price would demand a $3,327 monthly mortgage payment. That has created a huge affordability gap.
If you are fortunate enough to be able to buy now, you should. When rates come down you can refinance. Waiting will guarantee that when rates adjust downward, competition and prices will rise dramatically.
Please contact me if you would like to have a referral to a great local lender or if you’d like to embark on your journey to home ownership.
Olympia Real Estate Blog 