What Should Buyers Consider now?

Here are some notes about our Housing Market now:
With demand where it is right now, it’s time for buyers to step up and not wait. Waiting opens doors for where this market could go later. 
So, Why now?!   --->

1. See the current low/stable demand as your opportunity. 

• Buyers, for now, can negotiate with sellers while demand is where it is. Buyers don’t always have this luxury, so it’s worth looking into now. At current levels, it’s reasonable that sellers are more willing to negotiate on price and other terms because of low competition. Buyers can take advantage of this and negotiate for lower prices, better terms, and even request seller concessions, perhaps  covering closing costs or completing more repairs.
•  If You Wait: An increase in demand later means competition and a seller’s market. Overall affordability can worsen in the competitive market. 

2. Price Increases Could Offset Lower Interest Rates

• Higher Prices in a Competitive Market: While buyers might be hoping for a further drop in interest rates, a resulting increase in demand could drive up home prices. Slight increases cause prices rises. Thus, a lower interest rate is put up against a higher purchase price. 
• For example, if interest rates drop by 0.5%, but home prices rise by 10%, you could end up paying more overall, despite the lower rate. A $400,000 home today could rise to $440,000 in a more competitive market, which would erase any savings from a slightly lower interest rate.

3. Uncertainty of Future Interest Rates

• Rates Could Increase Instead of Decrease: Waiting is speculative. Rates are what they are for now, and that’s what we know. We always think this makes sense to look and explore and perhaps now is even the right time to buy. It’s always relative. 
• For instance, what’s affordable now maybe wouldn’t be with where the later market could go (a 1% increase in interest rates, even as prices stay the same, could price someone out of the house they can go for right now). 

4. Long-Term Investment Benefits of Buying Now

• Building Equity Sooner: The longer a buyer waits, the more time they miss out on building equity. Paying down the principal on a mortgage can build wealth for your investment, and when buyers delay and wait they miss out on the appreciating home value. We have seen this demonstrably in our area over time, even from 3-5 year increments. 
• An example: Being decisive about buying now, you will benefit from any future home value increases as demand rises again. Over time, it always does, especially in our ever-growing market. Waiting means less of a return because of a shorter investment time. 

5. Interest Rates can be Refinanced Later

• Rates change, and so can you!: If you're concerned about locking in a slightly higher interest rate today, remember that you have the option to refinance later if rates drop further. Buying now allows you to take advantage of current low prices and negotiation leverage. Then, if rates do decrease in the future, you can refinance to secure those lower rates and reduce monthly payments.
• Current market advantages may mean that buying now, with the rate you have, is the best decision for now. 

6. Higher Demand Could Create Tougher Lending Standards

• If demand increases, lenders may tighten their standards: This often happens as the market heats up and more people apply for mortgages. Higher demand can lead to stricter criteria for loan approval, such as higher credit score requirements or larger down payments, making it tougher to qualify for favorable loans.

In Summary:
Waiting for lower interest rates can be risky because of the unique advantages that the current low-demand market offers. While you might be hoping for a slightly better rate, you could miss out on:
• Negotiation power in a buyer's market
• Lower home prices before competition drives them up
• The ability to refinance later if rates drop
Waiting could lead to higher home prices, more competition, and stricter loan requirements, which could offset any minor gains from a potential drop for interest rates. By acting now, you secure more favorable terms in a market that still benefits buyers.

Be in touch and put us to work for you!