Date the Rate, Marry the Home

For years now homebuyers have enjoyed historically low interest rates on their mortgages. But just as the rates were historically low, they were also unsustainable — and as the saying goes “all good things must come to an end.” 

But do they? As rates have nudged up, home prices have stabilized and inventory is growing. Bidding wars are disappearing and rarely are people paying the tens of thousands of dollars over the asking price that they had been.

Homes are staying on the market a little longer and sellers are more open to negotiating their asking price. Simply put, the uptick in interest rates has taken people out of the market. 

But many of those folks spooked about a higher-interest loan need to step back and look at their individual situations. The most obvious factor is that you pay either rent or a mortgage — and with higher rents, a mortgage will most likely be about the same or less than monthly rent. 

In addition, every payment you make builds equity in your home — and equity equals wealth. Finally, you need to take into account that interest payments made on your primary residence could substantially lower your income tax liability.

So, for those folks, homeownership can make more sense even with higher interest rates.    

When you look at the big picture, you see a stabilized market with a growing inventory and sellers willing to negotiate — which is starting to sound a little more like a buyer’s market. I’d say if you’re even thinking of buying a home, get out there and see what’s on the market.

You just might find the perfect home for you. And as for those interest rates? You can always refinance when (and if) they go back down.