We hear it time and time again: it’s a seller’s market!
On the housing market, there’s a constant back-and-forth between a seller’s and buyer’s market. Right now, houses are selling quickly and often well over the asking price. This scares off a lot of potential buyers who can’t compete with the higher prices, but we want you to rethink the way you view housing costs.
When buying a home, it’s important to consider all the costs that go into it. There’s one cost in particular that plays into the buyer’s hand right now: low interest rates. A low interest rate means a $300,000 home with 3% interest can actually be CHEAPER than a $200,000 home with a 4% interest rate.
We hear from clients and colleagues all the time about waiting out the market and buying when home prices drop. Let’s flip that thinking a bit by looking at some factors that show today is a better time to buy than tomorrow.
Home prices may not actually drop
We’re seeing record numbers across the board for home sales and home prices. That can be intimidating, but there’s also no guarantee that’s ever going to change. There are services like Zillow and other websites that attempt to forecast the ebb and flow of home sales, but, in the end, there’s no real way of knowing what tomorrow’s housing market holds.
One indicator that high housing costs are here to stay: the number of companies who own rental properties is on the rise. Corporations see the number of buyers who are sitting out the market and recognize this indicates an increased need for “affordable housing” and rental properties. This has always been a factor on the market, but it’s more prominent in today’s market. These corporations see the profits in real estate and aren’t likely going to give that up anytime soon.
Interest rates WILL go up
While there is no guarantee home prices drop, there is a guarantee that interest rates go up. In fact, the rate went up for the first time since 2018 in March. It’s likely the rate will rise again in a shorter time period.
Even if the government has a recent change in interest rates, it’s possible the fed can increase them again soon after. This will always play a role in the housing market, and it’s likely to get more expensive instead of less expensive as the government fights inflation.
So, you may think “when the interest rates go up, home prices will go down as demand drops.” While this assumption is likely correct, it doesn’t necessarily mean your dream home will be any cheaper when this happens.
At the end of the day, you have to do what’s best for you and your family. At Velazquez Consumer Law, LLC, we understand the complications of the housing market. Home prices and interest rates can be difficult to sift through, so let us help. We provide solutions and shield you from surprises! Contact us today for all your real estate needs.
Velazquez Consumer Law
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