Is Now the Time to Buy a Home? Marry the Home + Date the Rate
October 26, 2023
It’s no surprise that potential home buyers of today view the housing market with a bit of skepticism. With public opinion stating that houses are unaffordable and unrealistic in today's market, it’s easy to believe that now is not the time to start looking into buying a home… but is that true? Contrary to popular belief, now might be the best opportunity to start building your new home despite these higher rates.
New Home Construction
The first piece of evidence to consider is that home prices will continue to rise for the foreseeable future. A combination of higher labor, material, and land costs have caused new home construction prices to increase, leading to higher overall purchasing prices for prospective home buyers. Home prices will only begin to drop if these issues are resolved, which does not seem likely to happen any time soon. Despite having the ability to afford a home in today's market, this fact alone is often more than enough to convince people to delay purchasing a home and wait for lower prices instead. With that in mind, let’s look at why today might be a good time to start the purchase process despite these challenges.
Though you can neither change nor accurately predict how the housing market will change in the near future, new home construction allows you to prevent your home cost from increasing any further. For instance, signing for a home with Riverwood locks in your purchase price at the beginning of the building process. As market prices continue to increase, you have the assurance and security of a concrete cost for your home. This also means you’ll begin building equity in your home sooner, making your home more valuable to you in the long run. In addition, with more people uncomfortable with stepping into the market, you’ll be left with more buying options!
Another major deal breaker for many prospective home buyers is the current interest rates on the market. These higher rates can be intimidating to look at when deciding whether or not to invest in a home. Though it may be discouraging to see 7 and 8 percent rates, the general consensus is that they will return to lower levels within the next few years. The good news is that you can refinance your loan down the road to take advantage of those lower rates. You may be asking, “why wouldn’t I just wait for the lower interest rates before deciding to buy in the first place?” That’s a fair question! As mentioned above, home prices are expected to continue rising over the coming years. Deciding to build today with higher interest rates will leave you with the option of refinancing in the future while locking in today's home price… it’s the best of both worlds! With that in mind, you can still have the financial flexibility and comfort you deserve in a new home.