After 13+ years of being in business, I have seen a lot of different markets. I’m fully aware of the challenges both buyers and sellers are facing when interest rates rise. Unless there is a significant life-changing event most buyers are sitting on the sidelines watching, waiting, and wondering. Will rates and home prices come back down? So what does it mean to be sidelined? Much like a professional sport, you’re waiting for the right time, right place, and right situation to be put in the game (buy or sell). That is unless you’re injured. Honestly, I think a lot of people are. They have taken a ride on the emotional buying/selling roller-coaster and have taken themselves out of the game 100%. Many people ask, “Matt what is your advice? What would you do if you were me?” I still recommend buying or selling when it makes sense to you. Don’t try and “time” the market. If interest rates go down, refinance, or pay a little extra every month, the rate will not have as much effect as it would with a full 30-year loan.
But what about home inventory? On the Seller side,Fortune Magazine noted that there is a rate lock-in effect. The mass majority of outstanding mortgages have rates below 5% – with a big chunk below 3%. If they sell now, they would be giving up their historically low mortgage rate. That payment jump is hardly appealing for move-up buyers. It’s going to be very very hard to persuade people to let go of those insanely low rates, Rick Palacious Jr, Head of research at John Burns Real Estate Consulting, tells Fortune “With many industry insiders believe tight inventory will help to prevent a housing crash. I agree, it’s a fact that low rates are keeping sellers in their homes. However, that’s where creative financing, such as a rate buy-down, becomes helpful. Some people still have to move… (home is too small/big, divorce, relocation, schools, etc).
Whether you want to chat about your situation and a long-term plan, you want to get going now or diversify your real estate portfolio, I have been here before and want to help.
Have a great week!!