A phrase often heard these days is “date the rate, marry the house.” As homebuyers have watched interest rates rise over last year, this has been the advice to cautious purchasers.
Today, buyers are reacting in one of two ways: they’re either making the decision to buy now before rates climb higher, or they’re waiting it out in hopes rates will fall. Let’s look at some context that can help you understand why so many buyers are jumping off the fence and into action rather than waiting to buy.
Mark Fleming, chief economist at First American, explains it like this: “…historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”
If you’re deciding whether to buy now or wait, this is important context to have. Today’s mortgage rate still gives you a window of opportunity to lock in a rate that’s comparatively lower than decades past.
Odeta Kushi, deputy chief economist at First American, explains: “…ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”
So, if you’re ready and financially able to buy now, it may make more sense to get off the fence and make your purchase sooner rather than later. As Nadia Evangelou, senior economist at the National Association of Realtors® (NAR), says: “With even higher interest rates on the horizon, I don’t see any reason to hold off from purchasing a home right now. If you feel financially secure, you should start looking for a home.”
At the end of the day, rates will always change. And when they change for the better, there’s always an opportunity to refinance to a lower rate if you’re already in your dream home.
Source: Why Rising Mortgage Rates Push Buyers off the Fence Keeping Current Matters (May 17, 2022) KCM Crew