One question that comes up a lot right now from people who have owned their homes for some time is, “Who is even buying right now with these rates?” If you have had an interest rate under 4% for the last decade, then sure, the rates seem high. But if you have never owned a home or you bought your first home before the mid 2000’s, they actually don’t seem unreasonable.
There are a lot of people still out house shopping. The reality is, a lot of the buyers in the market right now either don’t have a previous interest rate to compare it to or are actually thinking ahead and they prefer to have less competition in the marketplace. So the folks that are out shopping at this time, are at an advantage and that they can take their time to think about a house because there aren’t so many other buyers in the market. It’s expected that somewhere around five million more people will enter the home shopping realm if the rates come down even 1%. So for the person that’s house shopping right now, they have a little bit more time to think about it, a little bit more time to plan, maybe they can sleep on it. It doesn’t mean that they’re not ending up in multiple offer situations.
A competitive landscape does still exist, but it’s not nearly at the frenzy that it was before. And this gives these folks more buying power and they are happy that the prices aren’t continuing to escalate like they were over the last couple of years. So, we are seeing things “close” closer to their list price, even though those rates seem high to some people. Good advice is to buy when you need the home and refinance later when it is more favorable.