By any standard, it is a tricky time to be in the market to buy a home. With home prices are at record highs and bidding wars are as common as real estate agents (1500+ just in Augusta), I can’t blame you if you are reluctant to participate in the chaos. However, there are couple of things that actually make now a GOOD time to buy a home.
First and foremost, interest rates remain very close to historic lows. This is HUGE. So many homebuyers only pay attention to home prices and virtually ignore interest rates. As depressing as it is to think about, that currently overpriced house you pay $300,000 for today will actually end up costing you somewhere in the neighborhood of $500,000 after you pay interest on it for 30 years, and that’s at today’s low rates! Now imagine if interest rates were to double to 6% where they were in 2006, that same $300,000 house could end up costing closer to $700,000.
Now let’s assume that you waited a year for the market to cool down the way you knew it would, and the same house that was $300,000 has dipped to $250,000. You just saved yourself $50k, right? Well, maybe. If interest rates remain where they are today around 3%, yes. But what if rates begin to rise to account for the record inflation we are seeing so far this year and rates a year from now are 4, 5 or 6%? With the Federal Reserve already announcing that they expect to raise the base interest rate two times in the next year, there is a good chance that could happen.
As a prospective homebuyer, this leaves you with a tough decision. Do I “overpay” for a house now, but at a rock bottom interest rate, or do I wait for home prices to fall (they may not) but risk paying a much higher interest rate? I will acknowledge that now is not the BEST time to buy a house. That was about 2 years ago; however, if you need to buy a house and have the means to buy one, it may be YOUR best time to buy, which is what really matters.
I would love to chat with you to discuss our current market and answer any questions you have, so please feel free to reply to this email or just call me at 706-726-2981. Have a house to sell? Then now may be the best time we will see for a long time, so reply with the property address, and I will email you a free home valuation.