In the last month I’ve had conversations with three different clients that decided they are going to wait to buy a home until prices stabilize. That may take awhile, unfortunately. I completely understand though, bidding wars can be discouraging, especially if you feel you’re now priced out of the market for the home you want. No one can blame them for feeling discouraged as it’s really brutal to get to the point where you finally find a home you love and have invested both time and emotion to put together an offer – entailing hours of learning every tiny detail about a home, reviewing stacks of contracts and disclosures, getting a lender pre-approval after excruciatingly deep dives into your finances – only to lose to someone that has now set a new price ceiling for the area and type of home. And that ceiling is now above your maximum budget.
But thinking it will be better to wait until later this year or next is only a good plan if you can accumulate money that outpaces the increases in interest rates and home prices. Otherwise, you’ll be chasing an elusive target. In this circumstance, if you need to move, then the criteria for your home has to change – perhaps consider a smaller home and expanding the square footage down the road, or maybe look in an area that is a little less expensive.
Mortgage interest rates are currently very low, and experts across the board are forecasting increases in both home prices and interest rates. See the example in the infographic, showing that buying a home now means you’ll spend less in the long run (add an extra zero to those home prices if you’re here in Silicon Valley!).
Let’s connect to put your home buying plans in motion before home prices and mortgage rates climb even higher!