Pent up demand will soon drive a tidal wave of new home buyers into the market. A significant number of future home buyers have been sitting on the fence waiting for interest rates to come back down to 3.5% but unfortunately, there is no basis for this thinking – there isn’t a single economist out there who will tell you rates will ever come back down to those historical lows. Most economist are predicting rates between 5.75% – 6% over the next couple of years. At some point, what’s going to happen is that, all of these folks who’ve been sitting and waiting won’t be able to wait any longer, and when they see rates drop to 5.7% – 5.9% will jump back in and reignite the bidding wars we saw from 2019 – 2022.

With that will come many challenges for buyers and sellers:

1. Buyers will have fewer homes to choose from and a lot of competition, resulting in more multiple offer situations for prime housing.

2. Sellers will have plenty of buyer offers to choose from, but will, at the same time, find themselves in the buyer pool which will make buying and selling at the same time challenging.

A different way of seeing things:

There’s an old saying in financial circles, “rent the rate”. This means that instead of waiting until the perfect scenario presents itself, you take what the market will give you now, and buy down later. In the real estate world this is referring to interest rates, and the cost of borrowing money to purchase a home.

If you were a home buyer in the last 6 years you know what we’re talking about. When interest rates were low – everybody was buying. Many missed out of some great homes because there were more shoppers than houses they could afford- what we refer to as inventory. Just like when the weatherman calls for icy weather, everyone runs to the store and buys up all the toilet paper, I digress. Likewise, when the cost of money (interest rates) are low, everybody wants to make a move, gobbling up all the available homes. When this happens, the price of housing will go up as the amount of inventory goes down.

So how do we get what we want and not pay an arm and a leg for it? A Paradigm shift! Think differently! One thing is sure, housing prices will continue to rise regardless of the interest rate – again, this is one of the driving forces behind owning versus renting. If you have to borrow money to buy a home then it-is-what-it-is, do what you need to do now, and over the long run you’ll be glad you did.

So if you want to buy a home, whether you currently own a home or not, consider this: Find a home that fits your families needs perfectly, and if its priced reasonably for the times we’re in, buy it! Get the best possible rate you can find, make room for it in your monthly budget, and when rates come down – refinance.

On a personal note, I want to encourage you to make decisions using sound wisdom, considering all the facts and taking into account all the available information from trusted sources. Don’t allow fearmongering to cloud good sensical judgement. If you feel anxious, worried or even fear when thinking about all of this, it’s time to seek out good council. Remember, not making a decision can be just as bad as making the wrong decision