In A Perfect WorldYou're sitting there. Bright-eyed and ready to buy a home. You and your partner are discussing the benefits of home ownership and are excited to go on a new journey of investment
Is Now A Good Time To Buy A Home? Mortgage Rates Say 'Yes'!
Dated: August 25 2021
With the intense seller's market that the nation has seen in recent months, many are wondering whether now may be a good time to wait on the market to settle. Others believe that hopping onto the next best house will allow them to have a home before everything is gone. While both ideas are sounds thoughts, neither can be predicted.
This article will prodive a synopsis on current mortgage rates and how they may be advantageous to buying a home in this current market.
Mortgage Rates Nearing Record Lows
According to the 30-year fixed rate mortgage from Freddie Mac (picture cutesy of Keeping Current Matters), mortgage rates are fluctuating at near lows. Between 2.75 and 3.00 is an extremely appealing number. Even if the market is so crazy!
The problem that arises is that these mortgage rates match at a time where buyer's grow weary of wanting to stake so much money into a home. While getting a lower rate mortgage is enticing, what difference could it make when most homes are going well over the initial asking price?
Ride The Wave Or Wait For The Calm
The low mortgage rates are not here to stay. Experts agree that mortgage rates may well increase again as the market evens out. Many also agree that mortgage rates will rise even sooner than that, quoting only a few months before the increase again.
The question that you must answer as a homebuyer is this; whether you want to pay more initially with the market demand to gain more incentives in the future with lower mortgage payments OR whether you want to wait the market out to be able to buy a home at a reasonable price but sacrifice a better mortgage rate.
If You've Got The Money
If you have the ability to purchase a home now, it may be the best time to do so. Mortgage rates will continue to rise before they fall. Having the ability to pay up front will come as an advantage for you in the future. With a lower rate, you will owe less to the lender over a 30-year fixed term. This means that you will owe far less on your home in the long run. However, this does come at the cost of paying more in the beginning.
If You've Got The Time
If you have the patience to wait out the current market, you will gain the advantage of having more options in the future on your dream home. There is no telling when the current seller's market will end, but when it does it will put you next in line for better offers.
This does come at a price. Mortgage rates are typically set to match the market. There is a strong change that those rates will have risen to match the market at the time. While this means that you will have a better deal initially when you purchase the home, you will naturally pay more over time for your 30-year fixed mortgage as rates rise.
When Is The Best Time To Buy For Me?
When it comes to timing the market, nothing can be certain. The best advice I can give is to keep searching for the home that you dream of.
If you have the money, now may be the best time to get in. Mortgage rates will not remain this low for this long. You may put yourself at an advantage for taking the leap.
If you have the time, there is no reason that you need to sacrifice so much up front to win a house bidding war. Allow the market to settle more as new opportunities present themselves. Just remember, mortgage rates will not be the same from even one month ago.
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