Shatter the Biggest Myths About the Housing Market with These Eye-Opening Truths!
Hearing rumors about the best way to navigate the current housing market? Let's get some real answers! Here are two of the biggest misconceptions about homebuying in today's market.
Myth #1: It's best to wait until prices fall to buy a home.
The biggest error is believing that home prices will fall considerably. After home prices skyrocketed, it's easy to believe what goes up must come down. However, that's unlikely to happen.
The current lack of available homes for sale is the primary factor driving home prices, and the steady buyer demand helps keep prices from dropping too far.
Waiting for a significant change could mean missing out on the current favorable buyer environment. If prices (or mortgage rates) drop significantly, sidelined buyers will flood the market, driving up competition and prices.
Myth #2: It’s best to buy when mortgage rates drop.
30-year fixed mortgage rates went from historic lows (2.65% in January 2021) to over 7% in early 2023. That jump feels immense, leading many to believe it's better to wait for the mortgage rates to come down.
However, it's nearly impossible to time the market. Plus, competition for homes will rise whenever costs come down from inflation cooling.
The solution? Look at your entire financial picture and not just your payment.
For example, when rates were about 4%, buyers had to offer more than the list price and couldn't negotiate any repairs or seller concessions. On a $400k home, that could tack on an additional $40k!
Buying a home under the list price with seller concessions and repairs is more feasible today.
Remember, you can always refinance your interest rate. But you can't go back in time to renegotiate the purchase price.