Congratulations! We Made It! 2023 is officially wrapping up and Q4 is almost OVER!
That seems to be the feeling of many Americans as we reach the end of one of the most difficult financial years, we have experienced post the 2008 crisis that tainted the home buying consumer market. The new normal of higher interest rates and low to steady housing availability has driven many buyers to “wait out the market.” Unfortunately, waiting almost always seems to be won by only one party: not the buyers, not the sellers, but Time alone.
The waiting game is a finicky one that always leaves the next buyer saying, “I wish I would have purchased last year!” There is always an opportunity cost associated with every real estate transaction regardless of how favorable the market is when you buy. 2020, the best the rate market was in decades; “I wish I would have bought at a lower price and refinanced now.” 2021, “I wish I did not pay over market value, but I’m happy my rate is lower than today’s rate.” 2022 and 2023 many buyers decided to wait in hopes that rates would drop and here we are.
Trends are always going to stay on pace but are never 100% guaranteed. There are always outside driving forces that are out of financial forecaster’s scopes that have market shifting powers that are not always seen as direct correlators to pivoting points in the financial industry. That is why my answer to the question, “When is the best time to buy?” will NEVER change; the answer is always “Yesterday!” A buyer should always purchase a home when they are ready and they can afford it. The game of waiting and predicting for a better scenario in the future rarely leads to a better scenario. Those who waited for a better interest rate tend to pay more for their homes and vice versa, those who wait for a lower purchase price tend to see a lower cost when rates are increasing. So where do you fit into the equation?
As November came to an end, we began to see a slight fall in interest rates and a slight increase in consumer confidence in the Home Buying market. As rates dipped going into the Thanksgiving holiday, mortgage applications began to increase in the month of November. Mortgage interest rates have dropped from the low 8’s to mid 7’s over the last few months with some economic outliers forecasting rates to drop into the 6’s over the next few months and the vicious cycle will begin again. Do I buy now or wait for the lower rates?
If rates do drop, will prices go up? I can afford more home with lower rates, but will I have to come out of pocket above appraised value to ensure my offer gets accepted? What if… What If.. What if. Homes are currently sitting longer on the Las Vegas market with occasional price drops and seller concessions, but how long will that last? Will rates below 7% cost you an extra $10,000, $25,000 or even $50,000 out of pocket to guarantee your offer being accepted? Rates are going to move and the housing market WILL adjust. Consumers that need to buy will continue to shop and those on the fence may save a few dollars or may find themselves being priced out of their current market level.
Always remember, with real estate, you should NEVER wait to buy, you should always Buy and WAIT!
Daniel Herrera is the Senior Mortgage Loan Specialist at Laser Mortgage. He can be reached at 714.878.3112 or daniel.herrera@lasermortgage.com
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