3% interest rates are good for homeowners, not buyers

I posted this trial reel on Instagram and it currently has over 65,000 views which by my standards is a lot.

Several experts showed up and came for me in the comments 😆 so let’s talk about it.

One of the comments said,

“By this logic even higher interest rates
would be even better for buyers.”

It’s hard to always distinguish trolls, but yes any analogy taken too far breaks down. Nonetheless, my point still stands. Let me break it down a little further.

Like anything else, there are pros and cons.

When interest rates are low, your buying power increases. This is a good thing. However, everyone else’s buying power increases too. This is where a good thing isn’t so good anymore.

We just experienced this in 2020. Rates hit historic lows, sub 3% 🤯 and what followed?

A ton of buyers entered the market, competition went crazy, supply could not keep up with demand, home prices skyrocketed, bidding wars became the norm, and some homes closed for 6 figures over the asking price. It was absolutely bananas.

So even if you could get an offer accepted, that’s a big “if”, you were still paying a premium.

On the flip side, as rates have increased, the market has slowed down. Why? Because buying power has gone down as loans have gotten more expensive and many buyers have been priced out of the market.

Therefore, there is more inventory than demand. Homes are sitting, prices are dropping, and less competition creates opportunity.

HERE’S THE TAKEAWAY:

If you are still a buyer in this market meaning you haven’t been priced out, and you are still in a position to buy a house then you should absolutely do it.

Don’t wait for interest rates to drop, if you do you’ll be playing a losing game. Instead shift your mindset and think differently about rates. Leverage them to your advantage.

You can find a good deal in this market and still have room to negotiate! Sales price, credits towards closing costs, or have the seller buy down your rate, etc. You have options!

Yes, I’m a realtor. Yes, I would be honored to help you or a friend buy a home.

But I tell you all of this because I actually believe it. I’m actually doing it. I just bought a home this year with a 6.5% rate. I have felt and still feel what you’re feeling when looking to buy a home in this market.

It’s not always easy, but with the right strategy, the right mindset, and the right realtor 😉 you can get the house you’ve been eyeing.

And then, when the time comes and rates drop you will be in a position to refinance while everyone else is fighting to get their offer accepted 👀 

How are you liking the weekly newsletter? I’d love to hear your feedback. Simply reply to this email.

And you’ll get a gold star if you share this with a friend.

Thanks for being here. Thanks for opening my emails and reading each week.

THANK YOU!

See you next week 👋