Mortgage rates have spiked from last year’s lows. However, if buying a house has been on your mind, now is a good time. If the rates increase next year, you stand to gain on having purchased at a lower rate. And if the rates fall, you can always refinance it. If the mortgage payment is within your budget, it is advisable not to wait for mortgage rates to decrease.
Why is it a good time to buy a house?
Mortgage expert Ivan Simental believes it is a good time to buy a house even with the prevalent mortgage rates. According to him, the real estate market has shifted from being seller-centric to being buyer-centric. In addition to that, the winter season is conventionally viewed as a good season to buy a home as listing prices tend to drop toward the end of the year.
Reasons to get your dream house now
Several factors are making it a lucrative period to own real estate.
- More inventory and concessions: There’s more supply than demand. This means that there are more available homes than there are buyers. Due to this demand-supply imbalance, sellers are being forced to lower their listing prices and give more concessions. Better concessions could help buyer cover closing costs or get reduced interest rates.
- More time and leverage: With houses not selling out as fast as they used to, buyers now have more time to consider their options. And this gives them the leverage to negotiate for better prices, contingencies, and renovations/repairs.
What to consider for first-time buyers?
If you are a first-time buyer, try to reduce your out-of-pocket costs such as closing costs. This becomes a significant factor if you decide to get the mortgage refinanced later as this fee would be charged again. Low- and no-down-payment loans as well as concessions can help reduce your out-of-pocket costs. Another beneficial strategy could be to improve your credit score which can help you negotiate better interest rates.