You're reading that right. It really is a great time to buy a house. What you've been waiting for the last couple of years is here; the market is finally in your favor.
Months ago, if you went to an open house it would be crawling with people eager to be new home owners. A bidding war would ensue and if you were very lucky and flush with all cash, you would win. Times have changed, interest rates are up and inflation is high.
So why is it a good time to buy?
Home prices are down across the board. Where there once were bidding wars, there are price reductions. While that's not the case for every property - our sale in Beverlywood had multiple offers and sold over asking - lower sale prices and price reductions are happening a lot now. Without the feeding frenzy, buyers have a real chance of getting a home they want to live in, that they have the means to buy, and doesn't require a massive remodel.
But what about interest rates?
We've said this a lot over the last couple of weeks. "You date your rate, you marry the house." If you spend $2 million on a house that was reduced from $2.8 million, you can always refinance to get a better interest rate, but you can't get that $800,000 back. Plus, there's just not as much competition so if you have your finances in order, now is the time to get serious about buying a home. And we emphasize now because once spring comes, there will be more people looking.
"For a 30-year, fixed-rate mortgage, the average rate you'll pay is 6.84%, which is a decrease of 40 basis points compared to one week ago. (A basis point is equivalent to 0.01%.)"
"The average rate for a 15-year, fixed mortgage is 6.22%, which is a decrease of 24 basis points from the same time last week." and
"A 5/1 ARM has an average rate of 5.54%, a downtick of 8 basis points compared to last week. "
We should also remember that historically, about 6 percent is on the low side. In 1981 mortgage interest rates went up to an all-time high of 16 percent, in 2000 it was about 8 percent.
Honestly, we don't know what will happen from now until the new year, but we do know that competition and home prices are down. If you want to talk it over with us, just give us a call!