Waiting until rates fall further to buy? That could be very expensive!
Are you moving to Charlotte? Relocating for work? You may be thinking of renting. If you're like a lot of potential home buyers in Charlotte, you spent 2022 on the sidelines. That's OK! Frankly, my wife and I were there too! We wanted to buy our next home, but decided against it last year. Why? Rates were pushing 8% and home values were at all time highs! Even with a significant down payment, our monthly payment would have at least doubled if we bought a home. So we decided to stay put.
The math is quickly changing though! Rates have ticked down below 7% for the first time since May. In addition to that, some homes are sitting on the market for a month or two and taking significant price drops (keep in mind that these are homes that were overpriced to begin with -- we're still selling our listings with multiple offers, over asking price in the first weekend). Things are headed in the right direction for home buyers for the first time in a long time. It's still a strong sellers market due to lack of inventory, but savvy buyers (with a good agent!) are beginning to find deals!
Why not wait until rates fall further?
Rates are expected to continue to drop throughout 2024, so why not wait until rates drop further to purchase your next (or first!) home? The answer lies in what happened during the pandemic. Remember when rates were around 3%? Home values shot up by $100K+ almost overnight! The reason for that was people could still afford their monthly payments -- even at the significantly higher sales price. Rates aren't going to fall to 3% this year (they may never get that low again), but even if they fall to 6% or 5.5% we will see the same affect.
As rates drop, demand will increase and home prices will rise significantly. There's not enough inventory, and there's a lot of people sitting on the sidelines with significant equity and cash reserves. You do not want to be competing with them when they enter the home buying market. It's a catch-22. You don't want to buy until rates fall further, but as soon as they do fall, home prices and competition will rise again significantly.
So what to do?
The answer is, if you can afford it, buy your dream home now! Before rates drop more, before the market is flooded with wealthy buyers who will outbid you, and before home prices take a big jump up again. Remember, if the home has been on the market for a few weeks you can negotiate on price. And the monthly payments might be higher than you would prefer, but since rates are expected to come down throughout the year, you can refinance later in the year to lower your monthly payments. And the best part? Some lenders are offering "refinancing incentives" if you buy now. For example, one of my favorite local lenders is offering no lending fees on their refinances for the next 2 years after you close on your home. In other words, instead of paying $6,000 - $9,000 to refinance, you're looking at something closer to $2,000 (attorney fees and the appraisal fee). This is a big deal!
In a market like Charlotte, the best time to buy a home was 5 years ago. The 2nd best time to buy a home is tomorrow! The economic fundamentals of the Charlotte market are incredibly strong. Job growth is cosistently high, over 100 people per day move to the Charlotte area. We are consistently ranked in the top 10 real estate markets in the country.
How to get started? Just call or text me at 704-351-0987.
