Two Mortgage Questions I Get Nearly Every Day

For today’s topic, I want to share about two questions that I get asked every day:

• What is going to happen with interest rates?
• Is now a good time to buy a house?

Interestingly, even though these are the two most common questions, I don’t have a very good answer for either one of them!

First: What Will Happen with Rates?

We all know what impacts interest rates. Generally speaking it is related to what is happening in the mortgage-based securities market and what is going on with Fannie and Freddie. Also, what is happening with bonds?

We don’t know what is going to happen here, because they are moving based on what is happening in the current financial markets. These markets are some of the most unpredictable things in the world.

We have no idea what will happen with interest rates. What should we do about it? If you currently have a house, the smartest thing to do is lock the interest rate when you get it. It’s like gambling if you don’t have your interest rate locked. Sometimes, based on the current news, we might make decisions to lock right away or wait until after a certain event – I’m always watching these things and can offer personalized advice for you.

But the reality is that we are kind of just guessing.

Second: When Should I Be Buying?

Everyone has differing opinions about this. Some people think that the housing market is going to crash because it’s not sustainable. And then there are people who think it is going to run.

When I look at the last four years: starting in early 2020 when COVID hit, it seemed obvious to me that we would see housing prices come down. Of course, that didn’t happen! We saw some of the biggest year-over-year increases for a few years.

When we finally cleared the slate, then inflation hits and interest rates went from 2 – 3% to 6 – 8 %. During this time, everyone was saying it would crash the market. There was a period where housing prices came down, but now we are back at all-time highs.

Earlier this week, new housing data showed that our month-over-month increase is more than 1%!

What is Going to Happen?

Sometimes it is counter-intuitive and we can’t make sense of it. We really don’t know what is going to happen. Of course, I have my opinions on these topics. Unless we see a lot of inventory added to the market, I don’t see how prices are going to fall.

Rates are going to fluctuate. Don’t let your decision about getting to a house be based on the interest rates. If rates are too high and make it impossible for you to get into a house, then you either need to adjust the house that you want or wait for rates… but you don’t know what you are waiting for at that point.

The truth is that you cannot time the market. There is no way to know! We are on a trend of 4-years with ongoing increases, during a time when I would have guessed that we would see a drop in prices.

When should you buy? When it feels right for your unique situation: when you’ve saved the money, you can afford it, and you’ve got stability.

Even though we don’t have solid, definitive answers to these questions, there are always options available. Reach out to me and my team any time if you want personalized recommendations.