The #1 Question that keeps coming up: Should I Purchase a House Now or Wait?
With the recent rise in interest rates starting in March 2022 there has been a softening in the purchase market for buyers. The 3% rates are no longer and are now settled in the upper 6% – 7.5% range. With rising rates credit scores have never been more important than right now. Lower credit score clients have some great options in an FHA Loan due to their flexibility on the loan approval requirements. Typically higher credit score clients will go with a Conventional Loan that normally consist of a stronger borrower typically related to a higher down payment or credit profile.
Should you wait to purchase later when rates come back down?
Simply put no, you shouldn’t wait to purchase. Let’s dive into the case to purchase now. This is a golden opportunity for you to get in now when most are fearful sitting on the sidelines. When rates decrease the supply of buyers will increase, driving up demand for the same homes which in turn leads to higher prices. What does this mean? The same home today that is selling for $500,000 will likely command as much as $525,000+ in a multiple-offer situation and likely more if the home is in a sustained growing area like many of the cities across Texas.
“Date the Rate and Marry the House”
Most loans originated from 2022 – to current market conditions will have the opportunity to refinance in the future. Analyst predictions indicate rates will come back down, it could be 6 months or a few years but, the opportunity will come up to reduce your mortgage payment in the future. In short, this is not your forever rate, buy the house you want, and move to the area you’ve been thinking about!
This is a Business Decision you want to get right.
If we take that same analysis of a current home today selling for $500,000 vs $525,000 in the future does it make sense to pay a higher payment now or purchase the home for a higher price later? If you buy the home today that future equity is yours with an equity increase of $25,000 which equals wealth building for retirement. Even with increased payments of $200 – $300 with higher rates.
If you’re renting it’s critical you quit throwing money away to a landlord if you can qualify to purchase. It does make sense to have a payment higher now with the tax deduction benefits claimed on your tax returns, home appreciation, a stable living environment, and the opportunity to lower your payment in the future. Ultimately there could be other factors involved in your decision but, financially speaking if you can qualify, the time is now.
Let’s Review the Benefits of Purchasing Now:
+ Home Equity appreciation that is yours
+ Wealth Building Asset
+ Tax Deduction Benefits
+ More homes sitting on the market allowing you more options
+ Less Competition to get the home you want
+ Pride of ownership – the home is yours paint those rooms and create those memories
+ Diversify your portfolio by adding real estate
We’d love to speak to you if you’re on the fence. We will help review your loan options and answer all your questions. Call us direct with any questions 281-627-4222 or fill out the “Quick Quote” form on the right side of this page.