Fall in Love with the House, But Just Date Your Rate
If you're tired of throwing away money on ever-increasing rent payments, know there are options here in Charlotte, North Carolina. The key is understanding the relationship between home prices and mortgage rates. While the adage says to "marry the house but date the rate," current conditions actually call for falling in love with the house while just dating the rate.
What does this mean? The house itself is long-term; you can make it suit your needs for years or decades to come through renovations and remodeling projects. Mortgage rates, on the other hand, fluctuate often depending on market conditions. So while you don't want to become attached to a particular rate, you do want to commit to the right house for your needs.
The Best Time is Now for Charlotte Homebuyers
Charlotte home builders are currently offering discounted mortgage rates to incentivize buying, with some as low as 4.99% on new construction. Pair discounted rates with slowed rising home prices, and 2023 presents an opportunity. Building now means locking in today's competitive prices for a home that will be move-in ready next summer when rates may fall further.
By getting pre-approved and starting the building process early, you secure the home and rate combination that works for your budget today. If rates drop before closing, you can simply refinance to the lower rate. Rates have plateaued recently, but economists predict decreases in 2023 and 2024 as the market settles. Buying now starts the clock on turning rental payments into equity.
The Perils of Waiting for the Perfect Rate
While the strategy of waiting for the absolute lowest rate is tempting, it carries significant financial and competitive risks. Every month spent waiting is another month of non-recoverable rent flushed down the drain. And if rates drop, you can expect rising interest in buying among those also waiting on the sidelines.
More buyers coming back into the market all at once creates more competition. Higher demand leads to higher sales prices, minimized negotiation power, and the potential return of bidding wars. So while you may get a lower rate, the home itself will cost you more. Plus, rising prices impact the size and condition of house you can afford. recently slowed appreciation can't offset years of double-digit gains.
Lock In Today's Prices with Builder Incentives
New construction allows buying during slower winter months to lock in competitive pricing and incentives psychiatrists before the spring and summer rush. Most projects take six to nine months. So if you start now with a discounted rate in hand, you'll close when both prices and rates could be higher.
Builder incentives also lower closing costs, and some offer additional rate discounts for using their preferred lenders. Take advantage of what's available now, as rising demand will scale back incentives. With new homes, you gain customization options not possible with existing homes, energy-efficient and designer finishes, warranty protections, and brand new systems and appliances.
Homeownership Offers Stability and Equity
While mortgage rates go up and down, rents only seem to increase. Owning a home provides financial stability without unpredictable rent hikes. Plus, your monthly housing payments build equity that you can tap into later via low-cost home equity loans or lines of credit. Rent payments disappear forever, while mortgages end when the home is paid off.
Even if you bought when rates were higher, refinancing is an option once they drop. While you can't time the absolute bottom of the market, current conditions make buying the right home an excellent move. Lock in lower prices and discounted rates now before higher demand allows sellers to scale back incentives. Just be ready to refinance for a better rate when the opportunity arises.
