Published June 21, 2023

Is it Better to Buy a House Now or Wait for Interest Rates to Drop Again?

Written by The Norman Home Team of Keller Williams Gateway

Is it Better to Buy a House Now or Wait for Interest Rates to Drop Again? header image.

If you're in the market for a new home, you may be wondering whether it's better to buy now or wait for interest rates to drop. Interest rates play a significant role in the cost of borrowing, and they can have a big impact on your monthly mortgage payments. In this blog, we'll take a closer look at what you can expect if you're considering buying a home.

Factors affecting interest rates:

There are several factors that can impact interest rates, including the state of the economy, inflation, and monetary policy. The Federal Reserve sets monetary policy, which can have a big impact on interest rates. If the Federal Reserve raises interest rates, borrowing costs will typically go up. Conversely, if the Federal Reserve lowers interest rates, borrowing costs will typically go down. The current interest rate has been floating between 6 and 7%.

What to consider when deciding whether to buy now or wait:

First, you should consider the state of the housing market. Are home prices rising or falling? Are there many homes available for sale, or is inventory low? If home prices are rising and inventory is low, it may be better to buy now before prices go up even more.

In Maryland, even with interest rates rising, housing prices are not falling and sales are not slowing down. As of May 2023, there has been a problem with low inventory of homes to buy since 2010. The economy in Maryland is strong, which is bringing more people to move here for the job market which is bolstered with several major hospitals and military bases. While other states are seeing a slow down in the housing market, Maryland is still seeing houses going under contract within about 7 days.

The cost of waiting to buy will cost more to buy a home later down the road. Sometimes buyers get caught up in the interest rate and are looking at the high interest rate as being something that will last for 30 years. Buyers are not marrying the interest rate and as rates fluctuate, they can always refinance into a lower rate.

Second, you should think about your personal goals. Are you looking for a place to call home for the long term, or are you only interested in a short-term investment? If you're looking for a long-term home, it may not matter if interest rates are higher now or lower later. You'll still be living in the home for many years, and the impact of higher interest rates will be offset by the appreciation of your home over time.

If you're thinking about buying and would like a no-obligation consult to see how we can serve you, contact The Norman Home Team at 443.489.5225! Visit our website for information on all the services we provide We look forward to hearing from you and helping you achieve your goals

If you're thinking about buying and would like a no-obligation consult to see how we can serve you, contact The Norman Home Team at 443.489.5225! Visit our website for information on all the services we provide We look forward to hearing from you and helping you achieve your goals