Buying a Low-Mortgage House vs. Securing Your Dream Home

Most homeowners who wish to sell their homes and move to another city or state put the plan on the shelf for one reason: the increasing mortgage rate.

The 30-year fixed mortgage rate in the US has reached over 7% in 2024. For home buyers, this could mean 30-year extra expenses they do not need to shoulder should they wait for the mortgage rate to drop. Fortunately, the wait may not be much longer.

Several market experts predicted that the 30-year fixed mortgage rate will drop to 6.1-6.5% until the end of 2024. This poses the question: Should you wait for “the drop” or move to your new home now?

This blog will explore two options home buyers may consider when deciding the best time to move.

Play the Waiting Game

As the saying goes, “Good things come to those who wait.” While enduring nosy neighbors or longing to escape the city for a peaceful rural life can be frustrating, being patient for mortgage rates to decrease can ultimately prove rewarding.

Just imagine the thirty years you’ll have to pay the extra 1% mortgage rate if you decide to buy a new home now. Ten to 20 years from now, your future self will thank you for putting up with all the hassles of postponing your plan to move out.

However, playing the waiting game also has drawbacks. One is the increase in demand, should the mortgage rate drop. Following the law of demand, high mortgage rates equal low demand, as observed in the relatively fewer activities in the real estate market today.

When the mortgage rate drops, the demand for houses will increase, resulting in tighter competition among those who wish to purchase a house. Remember that you are not the only one willing to play the waiting game. Several homebuyers are anticipating lower rates like you do.

Early Bird Catches the Worm

If you’re looking to avoid the fierce competition among homebuyers when mortgage rates drop, consider buying your home now. While you’ll start with a higher rate, you have the option to refinance to a lower rate in the future as rates decrease, potentially saving on interest over the life of the loan. This strategy ensures you secure the property you desire with less competition.

Quest for the Better Choice

Buying a house is a long-term financial obligation. Unlike other things you can buy with a one-time payment, real estate can span decades before you can claim it 100% as yours. With that in mind, it is crucial to be more informed when deciding the right time to buy a property.

If you are looking for a specific house design or prefer a particular location, and you have the financial capacity to pay the current mortgage rate, buying a property before the demand surge is a good decision.

However, if you wish to take advantage of the forecasted lower mortgage rate this year, it might be better to set the idea aside for now.

Partner with a Seasoned Real Estate Firm Today!

Whether you’ve decided to buy a house now or later, consulting an experienced real estate professional can mean the difference between opportunities and risks.

Blue Pacific Real Estate is a highly esteemed real estate agency dedicated to assisting residents of Seattle and individuals aspiring to reside in the city in the acquisition or sale of their properties, providing comprehensive and insightful guidance throughout the process. We offer general contracting, brokerage, property development, and home staging services to help you reach your real estate goals.

Contact us today for a consultation.

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