Thanksgiving Time Could Be the Perfect Time to Buy
A lot clients and friends ask me regularly “Should I wait to buy a home? These prices seem crazy, they have to go down right?” Or they flat out say, “Nope, we’ll wait for sane prices to come back.”
A lot of buyers are waiting it out. But as the infographic above shows, it’s important to punch some numbers, because as you can tell, even with a lower sales price it’s possible you’ll end up with a higher mortgage payment. Not to mention the down payment will typically go up with sales prices as well.
Historically, the fall housing market sees less competition and better deals since children return to school and the holidays push many sellers to hold off until after New Year. But the pandemic changed that trend last year, and many cities are going through massive increases in sales prices even no. I’ve many buyers just get tired of looking and competing with the other buyers for the same home. Now I’m seeing some evidence that there’s much less competition- fewer multiple offer situations being the main one.
I never claim to have a crystal ball. While I work in the Winchester and Northern Virginia real estate industry every single day both as an investor and Realtor, I can’t say I can predict the future. I do however understand that it isn’t always the sales price that needs to be considered. I’m not saying the interest rate matters more in every single scenario, because each person’s plans and circumstances will heavily influence my own perspective. Real Estate is very location-dependent, so I can’t give everyone who reads this specific advice, but I will say after this article you might have a better understanding that may help you make an informed decision and take advantage of the way the market moves.
“The rule of thumb is when interest rates go up, sales prices move down to compensate”
If you’re concerned about rising prices, now may be the time to consider purchasing a home. It could cost you more to buy the same house a year later, even with a lower sales price. Even changes of 0.5% in rates can make a significant difference over the life of your home loan.
What the Experts are Saying
When you weigh your options of whether to buy a home or continue waiting, how much you’ll pay each month is likely top of mind. Monthly mortgage payments are rising with prices, but statistics from a variety of housing authorities, including Fannie Mae, which predicts a 7.4% home appreciation for 2022, and the National Association of Realtors, which predicts 2.8% appreciation for existing homes and 4.4% appreciate for new homes. “Experts also reinforce that 2022’s housing market is not at all likely to crash — the conditions we’re seeing are nothing like those that led up to the crisis of 2008.”
Bottom Line
It could cost you more to wait, and it could be the best time for a long time to purchase a home. If you’re curious about whether you’re able to lock in a great rate and buy a home, give me a call and we can go over your options. 703-517-0452
