The Bright Side to Higher Rates for Homebuyers
Updated: Dec 17, 2022
Rates are high right now and nobody is happy about it, Home buyers aren't happy because their mortgage payment will be high and sellers aren't happy because they aren't getting as much money for the houses that they're selling.
People that are selling their home have to settle for less money - which presents an opportunity for the home buyer. Why? because you're buying the property, you're not buying the interest rate.
When you buy a house at a lower price you paid "below market value" and although your interest rate is high, you will have more equity and gain equity faster when rates come back down. Plus, you can always refinance when rates come down too.
What I'm talking about is dealing with a temporary pain(high rate), in order to have a long term gain.
Last year when rates were low, as soon as a house would be put up for sale it would have 20+ offers within a day or two because there were so many home buyers. Making it extremely difficult to having a winning offer on a desirable property.
Now that interest rate have gone up, the pool of buyers has decreased and that same home described above is only receiving 1 maybe 2 offers in the first week, if that!
Buyers are back in the drivers seat and I believe that it may be worth dealing with the temporary pain for long term benefit.
Author: Alec Oesterreich
Senior Loan Officer NMLS 1623272
Approve Los Angeles
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