Many homebuyers I encounter are on the fence of buying now vs. waiting until later this year or next year to buy a home. “Will inventory get better?” “What if the market softens?” “Is another crash coming?” “I’m waiting for prices to come down.”
If we haven’t spoken over the phone or in person about these concerns yet, we definitely should. But below is some general information for you to consider when determining whether now might be the right time for you to buy a home.
It’s a fact that interest rates have been on the rise for a while now, although overall they remain relatively low. In the Bay Area, an increase in just 0.5% in mortgage interest rates could mean a difference of a few hundred dollars more towards a monthly payment. A 1% increase could mean hundreds or even thousands of dollars more per month (depending on your price point and loan amount). Thus, if interest rates increase as expected this year, waiting to buy could cost you an extra few hundred to thousands of dollars more per month.
On top of interest rate hikes, home prices continue to appreciate (see graph below). Price appreciation, combined with increasing interest rates, can push buying power down and home affordability out of reach. For some, this might mean dropping out of the market for buying a home entirely. However, even if some buyers drop out of the market, many new homebuyers continue to migrate to the Bay Area, where land and space for homes are finite.
There are many strategies we can implement to be more proactive with your home search to find you a home now — please reach out if you would like to revisit your home buying strategies to take advantage of my proactive approach.
On the other hand, if you need some help weighing the pros and cons to buying vs. waiting, please contact me at 415-993-0618. Everyone will have their own unique situation, of course, and for some, waiting to buy may be worth the cost.
**Please note, I am not a financial advisor; these are merely my opinions based on my knowledge and research on the real estate market. Please consult a professional financial advisor to determine what best fits your specific financial goals.