08/30/2024
The Fed is meeting in mid-September and most analysts are predicting a drop in interest rates. So, the looming question becomes whether to wait or jump in the market now to purchase a new home.
“If lower mortgage rates spark more buyer demand than inventory can keep up with, then prices may climb once again, eliminating the impact of lower rates,” says Realtor.com senior economist Hannah Jones.
Once rates drop, in addition to higher prices, there will be way more competition from other buyers.
“It’s easier to purchase a home with less competition now than to go out into the market later and compete in bidding wars, which typically drive up prices,” says Jason Gelios, a real estate agent with Community Choice Realty in Southeast Michigan.
The typical home spent 50 days on the market in July, so many sellers are still accepting lower offers and offering concessions. Once interest rates start decreasing, sellers will be less likely to do that.
For homebuyers who don’t want to wait, one option to consider is to buy now and refinance later. Homebuyers should also keep in mind that current interest rates are still considered quite low, historically speaking. The 30-year fixed mortgage rate reached a peak of 18.4% in October 1981.
Source: realtor.com
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