With hints of spring in the air, rising home prices are right around the corner. Our agents have been advising their clients that home prices are lower today than they will be in the coming months, and despite slightly higher interest rates, today is still the best time to buy.
Experts are predicting that "(t)he interest rate for a 30-year fixed-rate mortgage in the U.S. is expected to drop to 5.25% by the end of this year, according to a forecast by the financial services website Bankrate. That’s 1.49 percentage points lower than the current rate, and nearly two percentage points lower than 2022′s peak rate of 7.12%," meaning that buyers who purchase now will be able to refinance at a lower rate later.
Locking in a lower purchase price during the winter months is one of the best moves savvy buyers can make. Historically, spring and summer months have higher listing and sale prices, with the winter months always having some of the best bargains.
A recent Curbed article made the case that today “(is) the best time to buy in the next three years,” Mihal Gartenberg, a broker at Coldwell Banker Warburg, is telling her clients...some sellers are desperate now — like the backers of new developments who have started throwing her clients free storage and parking: “all the bells and whistles,” she says.”
Some buyers are concerned that a recession is looming, but according to a recent Forbes article the indicators are still showing that isn’t the case and that the interest rates today are perhaps the best ones we’ll see for some time to come.
"We have a hard time believing the economy is in recession today, given a strong labor market and corporate earnings growth,” said Tim Holland, chief investment officer at Orion Advisor Solutions. “We also remind ourselves that recessions are uncommon, as our economy was in recession just 8% of the time over the past 30 years.”
Nevertheless, a recession may still arrive at some point soon. The Federal Reserve is determined to raise interest rates until inflation starts to moderate from its current levels. That could cause the economy to decline in a manner that no one, much less the NBER, could argue isn’t a recession,” the Forbes article noted.
Whatever direction interest rates end up going, the best advice we can offer is to not wait for them. We encourage our clients to invest in properties that they can afford today, at today’s rate. When the interest rates drop again, they’ll be in a great position to refinance and perhaps even purchase something else.
By holding off purchasing now because of interest rates, potential buyers are forgoing months – or possibly years – of equity building and appreciation in their purchase. We realize that there are many different aspects to consider as our clients are considering buying a home which is why we work with our agents to make sure they are fully aware of market conditions and what might be coming, so that they can best advise their clients and those clients will be in the best position possible to make a sound investment that will be a great asset for years to come.