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A common question I often hear is whether one should wait for interest rates to drop before buying or selling. The straightforward answer is no. Presently, many buyers are in a holding pattern, anticipating lower interest rates to reenter the market, while sellers are hesitating due to the currently low rates.
However, it’s essential to recognize that as soon as interest rates decrease, there will be a surge in market activity. This will drive up prices, meaning you’ll end up paying more for the same house. Why, you may wonder? The primary reason is the limited inventory of available houses. With numerous buyers vying for a handful of homes, multiple-offer bidding wars become the norm, leading to increased home prices.
“As soon as rates fall, buyers and sellers will flood the market. ”
Industry experts are forecasting a potential interest rate drop by spring, and a recent report predicts a 6.5% increase in home prices by July 2024, which translates to $20,000 on a $300,000 home.
Now, sellers, take note: You might be in a more advantageous position than you realize. The equity in your home could outweigh the impact of higher interest rates, potentially resulting in a lower mortgage. If you’re curious about your home’s equity and how this scenario could work for you, please don’t hesitate to call or email me. We can crunch the numbers together to make an informed decision.
