In today’s real estate market, many potential buyers are hesitant, waiting for mortgage rates to drop before making a move. But here’s the reality: waiting could cost you more in the long run. Let’s break down why getting into the market now could be a smarter financial decision.

Market Overview: What’s Happening Now?

The market remains steady, with interest rates gradually ticking down. While there’s no expectation of a dramatic drop, we are seeing small, incremental reductions. But as rates decrease, home prices tend to rise. This means the house you’re eyeing today at $300,000 may soon cost $325,000 or even $350,000 should rates drop further.

The True Cost of Waiting

Many buyers assume that waiting for lower interest rates will automatically translate into lower monthly payments. However, as demand increases and home prices rise, the savings on interest rates may be offset by higher home costs. Let’s do the math:

• Assume you purchase a $300,000 home today with an FHA loan and a 3.5% down payment.
• With a 7% home appreciation rate (which is realistic given historical trends), your home’s value could rise by $21,000 in just one year.
• By year two, the total equity gain could reach $44,000.
• At the same time, your loan balance would be reduced to approximately $280,000.
• This means that in just two years, your home could be worth $350,000, giving you $70,000 in equity—just by making your regular mortgage payments.

Additional Perks of Buying Now

• Faster Equity Growth: The earlier you buy, the sooner you start building wealth through home appreciation.
• Avoid Higher Home Prices: As rates drop, competition increases, driving up property values.
• Mortgage Insurance Savings: Once you reach 80% loan-to-value, you may be able to remove mortgage insurance, further lowering your payment.
• Refinancing Opportunities: If rates improve significantly, you can refinance later to secure a lower monthly payment.

The Bottom Line

The longer you wait, the more you could end up paying for the same home. Both buyers and sellers are waiting for the right moment, but the best time to act is now—before prices climb even higher.

If you’re considering buying a home but unsure of your options, let’s have a conversation. Reach out to me today, and we’ll explore the best strategy for your homeownership goals.

Larry Burgher
Mortgage Loan Originator, NMLS# 1887785
Empire Home Loans