You may not want to wait for interest rates to come down to buy a home

By
Real Estate Agent with RE/MAX Stars Realty

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

Comments (5)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Sam... this is exactly the advice I'm giving to people here in the Charlotte area.

Nov 29, 2023 03:56 AM
Sam Miller

Hi Nina, Thanks for commenting!  The younger generation doesn't have the life experience regarding interest rates and many from the older generation have forgotten about that 22 year span and the cost of waiting - Sam  

Nov 29, 2023 04:04 AM
Richard Weeks
Dallas, TX
REALTORĀ®, Broker
Great information, thanks for sharing.Ā  I hope you have a great day.
Nov 29, 2023 03:58 AM
Sam Miller

Thanks Richard!   I hope this video connects with people who think it is best to sit and wait because there are times when waiting can be costly especially when there is rapid inflation and price increases - Sam 

Nov 29, 2023 04:06 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

I just shared this with a buyer yesterday. Great information. Thanks for sharing and enjoy your week!

Bill Salvatore, Realtor- Arizona Elite Properties

Nov 29, 2023 04:54 AM
Sam Miller

Thanks Bill!  I am finding that the majority of buyers don't consider the cost of waiting.  The ability to refinance the loan isn't something that most people consider or plan for - Sam 

Nov 29, 2023 05:03 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Sam. Don' wait to buy real estate. Buy real estate and wait! Sage advice. Why? Because you can't participate in the appreciation game unless you have skin in the game. Enjoy your day.

Nov 29, 2023 05:03 AM
Sam Miller

Wayne, I love how you posed your question and you are right about not being able to take advantage of the home value appreciation if you are sitting on the sideline and don't own a house yet - Sam 

Nov 29, 2023 06:17 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Sam Miller I don't see interest rates coming down anytime soon, and home prices continue to rise, so it is a mistake to wait to purchase a home in my opinion.

Nov 29, 2023 11:38 AM
Sam Miller

Thanks George for commenting!  I agree that the rates are likely going to hang out for a while and for the majority of people who can afford to buy, they should because it is impossible to time the market - Sam 

Nov 29, 2023 11:46 AM