Why Waiting for Lower Rates Might Cost You More

The Temptation of Timing the Market

Waiting for mortgage rates to drop may sound like a smart move, but there’s no guarantee they will. Interest rates can change quickly based on the economy, inflation, and other factors. Meanwhile, home prices may rise while you wait, potentially costing you more in the long run.

Instead of trying to time the market perfectly, focus on finding a home and monthly payment that fit comfortably within your budget.

The Cost of Waiting

Home prices may rise: Any savings from a lower interest rate could be offset by paying more for the home.

Missing Out on Building Equity : Buying a home allows you to start building equity as you make mortgage payments.

Waiting has a cost: The longer you wait, the longer it takes to begin building wealth through homeownership.

Timing the Market is Near Impossible:  Instead of trying to time the market, focus on finding a home and payment that fit your budget.

Rent is a cost: While you wait, your monthly rent payments help build your landlord’s equity and pay your landlors's mortgage—no financial benefit to you.

Strategies for Moving Forward

When interest rates start dropping more buyers will enter the market resulting in increased competition.

More competition for listings means less negotiating power for a buyer.

Right now buyers an negotiate for closing costs, temporary buy down for greater affordability, seller paid repairs, and negotiate a lower price. 
 
Waiting and hoping for a lower interest rate is not a strategy.

You can refinance an interest rate after you lock in a home price when the opportunity appears, but you can never go back and renegotiate your purchase price after closing.

With buy down programs you can can lock a price in today and keep the rate lower for 12 -36 months through a buy down paid by the seller.

Bottom line- Instead of waiting for the perfect rate, consider taking advantage of current opportunities.

Taking Action

Interest rates move up and down with the financial markets and are unpredictable.

Focus on what you control. Your budget, the home you would like to live in , and your timing.

The first proactive step is to speak with an experienced Mortgage Team to discuss your home buying goals, financial objectives, and affordability concerns. Request a custom Loan Plan so that you can betterunderstand the financing options and the best programs to help you get into the home of your choice that is within your budget. 

If you are in Arizona, speak with our experienced Mortgage Team. We are committed to educating our clients to make wise financial decisions.