Uncategorized โ€ข January 17, 2024

Thinking of Waiting for Lower Mortgage Rates to Buy a Home? Read This First! ๐Ÿ“‰

While waiting for mortgage rates to drop might sound like a savvy move, it’s crucial to consider the bigger picture. Here’s why:

  1. More Buyers, Steady or Rising Prices: When rates drop, more buyers flood the market. This shifts the supply-demand balance, often leading to stable or even rising home prices.

  2. Increased Competition, Fewer Concessions: A lower rate market means more competition. You might find yourself in bidding wars, offering higher prices, or waiving inspection periods โ€“ concessions you wouldn’t usually make.

  3. The Math of Waiting for Lower Mortgage Rates to buy a home: Let’s break it down with an example.

    • Now: A $400,000 house, 20% down, at a 7% rate. Monthly payment? Approximately $2,129.

    • 5% Annual Appreciation Over 5 Months: This adds about $8,215 to the home’s value.

    • Later: The same house, now $430,000 at a 5.5% rate. Monthly payment? Around $1,953.

  4. You save $880 on monthly payments, but you miss out on the $8,000+ of appreciation gained in those 5 months!

โš–๏ธ Weigh your options carefully. Sometimes, waiting for lower mortgage rates to buy a home might cost you more in the long run.

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