What buyers and sellers need to know about waiting due to higher rates.
“Should I wait for interest rates to go down before I move?” I’ve been receiving this question repeatedly, but the truth is that everyone is asking the wrong question. Today, I will explain how interest rates impact the real estate market and why they shouldn’t deter you from moving now.
If you’re a buyer, you should ask yourself the following question: What is more important to me: Saving 2% on my interest rate by waiting a few years before I buy, or saving thousands of dollars on my purchase price? If everyone waits for interest rates to decrease before they start shopping again, there will be a sudden influx of buyers when rates do drop. This will recreate the situation we witnessed during the pandemic, resulting in multiple offers and skyrocketing prices.
On the other hand, if you buy this year, even with a temporarily higher interest rate, you will benefit from the appreciation that will occur when interest rates go down. Consequently, the value of your property will increase, allowing you to refinance at a lower rate while building a significant net worth. Plus, you will have the advantage of owning your own home.
“Waiting to buy could cost you a lot of money.”
As a buyer, you need to seriously consider your priorities. Plus, it’s important to note that other factors, such as inflation, increased construction costs, reduced new construction, and a significant influx of immigrants will also contribute to higher prices soon. Therefore, I strongly advise against missing the opportunity to buy now, especially if you’re a seller.
Similar considerations apply if you’re planning to upsize or downsize. Waiting to save a few percentage points on the interest rate might lead to a situation where you won’t be satisfied a few years from now. While you may sell at a higher price, you’ll also have to buy at a higher price.
If you’re you’re contemplating moving, I highly recommend not waiting. If you’re an investor, the same principles apply. I’m an investor and an alternative lender, and I am actively buying real estate. Therefore, if you have any questions about this, please feel free to call or email me. I’m always willing to help!
