How to decide if you should try to time the market for a cheaper price.
Due to increasing interest rates and decreasing home values, clients have been asking me if now is a good time to buy. If you’re waiting for interest rates to drop, then you’ll be waiting for a long time. Over the last 15 years, the average 30-year mortgage rate has been about 7%, and there are some other important factors to consider when buying a home. If you’re concerned about the value of the home, you also need to think about how long you plan to stay in that home.
Some industry experts say the fluctuation in prices depends on the particular area’s subeconomic factors. A J.P. Morgan 2022 analysis of 116 metropolitan areas predicts housing prices to go in three general directions over the next couple of years. Some areas are predicted to drop 20% to 30%, some 10% to 15%, and some not at all.
Again, no one can say for sure what the future holds, but are you willing to take the risk of hoping that your area will be one of the few where prices fall? It is important to remember that many factors go into deciding prices, like interest rates, the state of the economy, the season of the year, etc. As a result, many experts believe it is not wise to wait for price decreases.
“What happens if you wait for a crash that never comes?”
People on this side of the debate say that trying to time the market to buy at the lowest possible point is often a fool’s game. The market changes often and quickly, so many are convinced that buying when it’s right for you and your family is the best choice. You never know when the peak is going to end, and you don’t want to have any regrets. If you plan to live in your home for five years or more, the market will be very different than it is right now.
There are fewer buyers in the market than there were a year ago. Less competition means buyers have more negotiating power. If interest rates drop, we’ll see more buyers come back to the market again. Now’s a great time to get pre-approved for a loan and watch the rates. If you see rates at a good number and you find a house you love, get it under contract. After you buy the house, you can look for opportunities to refinance later.
This is a lot of information to take in, so if you have any questions or want to talk with me about your specific situation, don’t hesitate to reach out. I would love to create a strategy with you that works best for you and your family. Call or email me anytime. I look forward to hearing from you.