Over the past year buyers were having to empty their pockets, waive inspections, waive appraisals, and give several pints of blood to “win” a house in the Phoenix housing market! That often left them without the funds to update, buy furniture, or even make repairs after they moved in. Then just when inventory started to improve, interest rates began to skyrocket leaving buyers wondering, “Should I buy a house now, or wait?”
According to mortgage expert Ivan Simental, the answer to that question is a definite “no, don’t wait“. To quote Simental, “Right now is the best time to buy a house….If you’re in a place where you can afford the mortgage payment and it’s not going to make you ‘house poor’, then 100% buy a house.”*
There are a number of reasons for not waiting to buy a house. Here are a few to consider:
Lock in your mortgage rate
A key point for today’s market is that buying now means avoiding additional mortgage-rate increases later. You cannot time the market, and a home should be a long-term investment. A year from now, even if prices come down slightly, mortgage rates may be even higher. In the end, that will cost a buyer more every month if they’re financing.
Increased inventory means less competition
Another big advantage for today’s buyer is that inventory is rising. There are more homes for sale and fewer buyers. That means that you can go house hunting and not feel like you’re settling because your choices are slim. You can afford to be picky. With the opportunity to find the perfect house, you won’t have to worry about buyer’s remorse.
More time and leverage
Thanks to less competition, homes aren’t selling at the lightning speed they have been. Buyers now have the luxury of time. Since homes are no longer flying off the shelves, buyers have more time to carefully consider their options and make sure they’re finding a home that’s right for their needs and budget.
With homes sitting on the market for longer these days, sellers are beginning to try to attract nervous buyers by offering incentives such as credits for buyers to buy down their interest rates, offering to pay buyer’s closing costs or providing home warranties. Sellers are also realizing that, unlike before, they are going to have to be more amenable when negotiating repairs.
You can refinance at a lower rate later
The old adage, “what goes up must come down” also applies to interest rates. Once interest rates drop in the next 12-24 months (and it’s fully expected that they will) you’ll be able to refinance at a lower rate. And keep in mind, if you decide to wait to buy once interest rates drop, the number of buyers will increase and your competition will be higher.
Should I buy a house now? The bottom line
Buying a home right now may seem scary with mortgage rates on the rise. But, if you can make it work, there are some major advantages to purchasing now. If you decide to buy now you’re going to build equity, get tax write-offs, and enjoy other incentives.
Contact the Donnelly Group
If you are looking to buy a home in the Phoenix area, the Donnelly Group has the expertise and experience to help you through the process. Please don’t hesitate to contact us at 480-792-9700 or by email, we’d love to help.