I was talking to a friend of mine who I knew had been house hunting for a while. He was excited that he was gong to close in about 2 weeks on his new home. He said, “I know some people say you should wait and see if prices drop more but I think interest rates will go up and then it becomes a wash.” That was the point of a Time Magazine article a few months ago.
He isn’t my client. So I feel that I can offer that as true opinion, not just a Realtor pushing a reason to buy and I don’t want to push it either. People are still buying. Though activity is slowing considerably, I have a pending home that has three people who want me to let them know if the sale fails. Buyers are still out there and have not completely disappeared.
Will interest rates go up? If inflation kicks in that could happen. And inflation will happen if there is too much liquidity in the market. Since 2001 they have said interest rates can stay this low but they did. As much of a boom that there was due to real estate it is surprising that there wasn’t more inflation. When inflation was rearing it’s head and the FED raised prime rate, it had little effect on mortgage rates.
The client whose house is pending has heard me tell him often that I think he would be better off waiting for things to settle down and then cherry pick a house. He continues to look. But, if he finds a house that suits him perfectly he should jump on it. Prices will recover one day. If they don’t there is something much worse going on. Buy if you are planning on staying long term, pick a house you love.
