Right now, if you are thinking about buying a home, you may be having a hard time finding something in your price range. Many prospective homebuyers are on the fence about whether to buy now, or wait for prices (or rates) to drop. Will housing prices decrease?
The answer depends largely on inventory. There is a shortage of housing available at the moment, which is one of the main reasons why sellers are able to command such high prices.
If that shortage persists, then yes, housing prices are likely to remain high. But if a large amount of new inventory is constructed, then we might see housing prices drop somewhat (or at least slow down their rate of ascent).
Keep in mind that it would need to be a lot of new inventory. Modest increases in inventory would not be sufficient.
We also need to consider the matter of mortgage rates. There are obvious benefits if rates decrease, because the lower your interest rate, the less you will need to pay on interest over the lifetime of your loan.
But there is one possible negative consequence of rates coming down. If they drop rapidly, people interested in buying a home may all rush to do so at once. That means that even if inventory has increased, the increase in buyer demand could outpace it. If that happens, we may seem home prices rise anyway.
If there is a more gradual decrease in interest rates, then there is a better chance that we will see housing prices cool a bit, which could make it more of a buyer’s market.
A Reason to Consider Buying Now
We have discussed some of the possible outcomes for home prices based on what happens with inventory and rates. But the question remains. Should you buy now, or buy later?
Ultimately, there are quite a few individual factors you will need to weigh before you can make that decision. But it is worth considering that regardless of what happens to home prices in the short run, over the long run, they usually go up. The more time you have in the housing market, the more you can potentially profit off of that increase. So, it may be worth it to buy sooner rather than later.
What about interest rates? Although they are currently high, you can take advantage of lower rates if they drop in the future. To do so, you will need to refinance. While there is a cost to refinance, it often ends up paying for itself in terms of your long-term savings.
Buy a Home in Florida
Whether you decide to buy a home now or wait, PLC makes the process fast and easy. As your Florida mortgage broker, we will help you find a competitive home loan. If you are ready to schedule your consultation, please call 954-840-8811. We are based in Cape Coral, and can help you buy a home anywhere in Florida.
