Waiting for Mortgage Rates to Drop? Keep This in Mind…
Is time moving in strange ways, or is it just me?
Somehow the start of the pandemic feels simultaneously like just yesterday, but also ages ago. Even as life has gone back to “normal,” there are serious shifts in our habits, economy, and culture at large that are impacting many of the decisions we make. This rapid shift was felt substantially in housing, and for some, it may make taking a leap of faith and buying a home a little more difficult.
In March of 2020, home sales screeched to a halt as we collectively tried to determine what the coming days, weeks, and months would bring. Then, with the rise of social-distancing, layoffs, and people transitioning to remote work, there was a refocus on the importance of home. A home where you have the room to work, relax, and feel safe. Lifestyle changes resulted in a sudden migration — to the countryside or suburbs, from expensive cities back to more affordable hometowns, or on to the big cities some had only dreamed of experiencing. As horrific as the pandemic was, it did illuminate the ways in which people were bogged down by the limitations of place, and provided an opportunity for change for the folks who needed it. As priorities recalibrated, the demand for housing only grew. Pair that with low interest rates and then queue the bidding wars!
Even if you weren’t in the market to buy a home from mid-2020 to late-2021, you probably knew someone who was. And if they ended up closing on a home, I can image that it was likely the 5th or 6th one that they put an offer on. Now that mortgage rates are sometimes hitting above 7%, I’ve heard many would-be buyers say that they wish they would have purchased sooner — but those same buyers could have been entirely outbid on every offer or ended up putting an extra $50K into a home that they only sort-of liked.
The truth is that higher rates mean less competition…and the moment rates drop, competition rises.
There are a number of reasons — from our country’s considerable housing shortage, to inflation and beyond — that the perfect combination of low interest rates and low competition is all but impossible. Instead of waiting for rates to drop, homebuyers should make the move to buy a home when it makes sense for them. What are your needs? Your family’s needs? What are you financially capable of right now? What are you financially comfortable with? How does homeownership align with your longterm plans? These are the truly important things to consider when buying a home — not what the current mortgage rate is. Rates change and refinancing is possible, but your needs may not be as flexible and life rarely falls into place so simply.
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Julia Van Valkenburg, REALTOR
OMNI Homes International
julia@buyselltucsonhomes.com
520-275-3514
