Rates Are High, So Should We Wait to Buy?

Rates are high, so should we wait to buy?

That's the question on every homebuyer's mind right now. But if we do the math, rates are an emotional pain point but not a very good data point.

Yes, the rate dictates how much you're going to pay each month. But say you're looking at a $500,000 house at a 7.5% interest rate. If rates drop to 6.5% (and I don't think that's happening anytime soon), that $500,000 house quickly becomes a $575,000 house because buyers will flood the market. And guess what? Now your payment's even more. 

At $500,000 and 7.5% interest your payment is roughly $3200 a month (with 20% down). At $575,000 and a 6.5% rate your payment is roughly $3400 a month with the same amount down.

Here’s a rule to remember – the price is FIXED, the rate can change. 

No, I’m not a “marry the house date the rate kind of guy” that felt too much like a marketing tactic to try and get buyers to make decisions that may or may not have been good for them.

I’m much more a data-minded person. Data doesn’t lie.

IF you can afford to buy the new house now at 7.5% this is an amazing time to purchase… We are asking sellers for: 1) Money off the price 2) Money to buy down the interest rate…

What if, right now, you could lock in a price of $500,000 AND get a rate buy down to a 7%? Wouldn’t that be better than “waiting for rates to come down” then having to pay $575,000 just because rates improved? Financially? Absolutely that’s better. Emotionally? Well, we have to get over that some times.

So don't let the rate dictate everything. It's an important data point, but it's not the only one.

If you or any friends you know have considered purchasing and want to talk it out I’m always here to help. Forward them this email or connect us via text (757.266.2876) and I’m happy to help talk it out and decide if it makes sense for them or not.

*As always, my own two (donut-filled) hands wrote this. No thanks to ChatGPT 😉)