There are 1st time homebuyers who have been thinking about waiting for mortgage interest rates to come down before they buy a home. That may not be the best approach to saving money on a home and here's why.
In 1971, the mortgage interest rates for homes averaged 7.54%. If you decided that you were not going to buy a house until the interest rates came down, you would NOT have purchased a home until 1993. You would have rented for 22 years waiting for interest rates to come down all while your monthly rent payments keep going up and up and up over those 22 years that you waited. Meanwhile, the value of most homes across the country during those 22 years nearly tripled.
There is a popular saying in real estate which is "Don't wait to buy real estate, Buy real estate and wait".
There is a reason that the biggest refinance boom in history happened over the last 10 years. People purchased homes years earlier at higher interest rates and they enjoyed benefits from owning their own homes for many years and when interest rates came back down, many of those home owners did NOT sell, they refinanced their mortgages and took advantage of the interest rates and the savings.
Here is a different way to look at this. Find a home that you love and "Marry that home" meaning buy it. However, date the rate meaning you can refinance it when the market adjusts and interest rates offer you a substantial savings. If home values keep going up like they have over the last 50 years you will very likely be glad you did. There are a lot of people who could benefit from understanding the trends of interest rates and inflation especially when it comes to buying a home compared to renting (regardless of what the interest rate is).
Sam Miller of REMAX Stars Realty at 710 South Main Street in Mount Vernon, Ohio 43050. Call 740-397-7800 SamMillerSells.com