Chief economists have recently reported that 175,000 fewer jobs were created this year than what was projected. In other words, the economy is not in as good a position as you might think. This development does bring some good news, though. Namely, interest rates are expected to soon reach figures never before seen in real estate history. And low rates mean a high level of opportunity for homebuyers. Even a small change in interest rates can greatly impact affordability.
Low interest rates mean great things for sellers, as well. Although there still isn’t a lot of inventory, throngs of buyers have been incentivized to make a move as a result of these low rates. In other words, demand has shot up despite the current lack of supply. However, this might not continue to be the case if supply grows significantly over the next few months. We will see a shift in the market eventually, whether it comes in six, 12, or 18 months. And when this shift occurs, prices will likely flatten out.
So could you potentially buy a home for less money if you waited a year to make a move? Maybe. But keep in mind that rates might be higher at that point. If interest rates rise even by 1%, your buying power will drop 10%. So even if you buy a home for less, your monthly payment will be more.
With all of this in mind, the first step you should take when you’re considering buying is to speak with a lender. If you can qualify to buy now, I believe you’ll get a better rate today than you would 12 months from now.
The bottom line of today’s message is this: When rates are low, it’s a great time to buy or sell.
If you have any other questions, would like more information, or would like to discuss your real estate goals, feel free to give me and my team a call or send us an email. We look forward to hearing from you soon.