If you’re holding off on buying in the hope that home prices will drop, it’s important to note that they aren’t. While they may not be surging at the double-digit rates of the past few years, there’s no doubt that home prices are still on the rise. Why is this the case?
Here are a few reasons:
- They’re not making more land: It’s a simple matter of supply and demand. Housing inventory is currently at its lowest level in 20 years.
- Scarce housing inventory: Part of the issue is the lack of new construction over the past several years, which has contributed to the shortage in housing supply.
- Government spending and deficits: Increased government spending is leading to deficits, which, in turn, result in higher interest rates.
- Moderate interest rates: While interest rates are higher than a year ago, they remain close to the 30-year average, making them relatively favorable for homebuyers.
What should you anticipate if both mortgage rates and housing prices decline?
In such a scenario, you can expect a surge of eager homebuyers due to pent-up demand, causing home prices to rise once more. The question then arises: should you wait for this potential price increase or buy now? It’s worth considering that while home prices have stabilized, interest rates are currently higher. Buying now allows you to secure a property, and if mortgage rates do drop in the future, you can explore refinancing for a lower rate.
Regarding your current situation, the decision to buy now or wait, as well as whether to sell now or hold off, can be pivotal. I invite you to give me a call, and we can engage in an open and honest conversation to help you make the best choice.
Tom Slupske | Realtor | Broker-Associate | RE/MAX Results | 763-235-7090