Source: Realtor.com
With the spring housing market approaching, homebuyers are wondering about interest rates. They’re right to be concerned.
In October 2023, rates hit a 23-year high of 7.79% for a 30-year fixed loan. Thankfully, they’ve been dropping to the high 6% range.
But With Falling Rates, What Happens Next?
Lower Rates Coming, But Gradually – While rates have been dropping, they’re still way above early 2022’s lows (around 3%). Experts predict they’ll dip further, but gradually. Don’t expect a sudden drop!
Homes Won’t Become Dramatically Cheaper – Dropping rates make homes more affordable, but don’t expect a miracle. While prices might decrease slightly, they likely won’t plummet. However, the good news is they won’t skyrocket either.
Get Ready for More Competition – The bad news: lower rates attract more buyers, potentially driving prices up due to limited inventory and bidding wars.
Expect Multiple Offers + Strategic Moves – Buyers might need to be flexible, submitting multiple offers. They may also need to make concessions like waiving appraisals or offering over asking price.
More Homes Might Hit the Market – Lower rates could incentivize some homeowners to sell, potentially increasing available homes.
Pre-Approval is Key – Get pre-approved early to be ready when your dream home hits the market.
Trading One Challenge for Another – Lower rates come with more competition, making the buying process potentially more stressful.
Buy Now or Refinance Later? – While higher rates are less desirable, waiting might lead to facing even fiercer competition and the need for risky tactics like waiving inspections. You can always refinance later, though it comes with additional costs.
In conclusion, don’t wait for perfect conditions if you find a home you love! The market is unpredictable, so act strategically. Consider factors like finances and personal circumstances. Ready to navigate this dynamic market with a trusted partner by your side?
