IS NOW A GOOD TIME TO BUY A HOME? EXPERTS WEIGH IN
Finance pros share timely insights on housing affordability, loan options, and the future of interest rates.
With interest rates significantly higher than years past – and the possibility of potential rate hikes on the horizon – homebuyers are left wondering if now is a good time to hunt for a new home.
These concerns were addressed with expert insights on the latest episode of Keepin’ It Real With Nick Bailey. Neale Godfrey, a financial guru and New York Times best-selling author, and Michele Beeson, a Denver-area mortgage broker with CMG Home Loans, joined the show to share insights around questions prospective homebuyers might have at the moment.
The general consensus: Buy a home when the time is right for you.
Interest rates and home prices
Beeson noted that no matter what happens with interest rates moving forward, no one should expect a return to the historical lows of recent years.
“Honestly, rates are not forever. We do not expect that [rates will drop to] what they were in 2020 and 2021, if ever again. A lot of people are saying [rates] will increase 1 or 2 percent in the next 18 months or so,” she shares.
However, she and Godfrey both discourage consumers from getting fixated on the rate and letting it dictate their life plans.
“The average homebuyer’s age now is 34, and if you look at the amount of people between 24 and 34, there are a lot of people coming up who want to purchase and will be looking to get into the homebuying experience. If people wait, their competition is just going to be that much worse,” Beeson warns. “But, because interest rates aren’t forever, there’s something to be done about that. If you purchase now, we can do something about lowering your interest rate in the future, versus waiting to purchase a home and having prices be higher or competition be thicker.”
In 2024, Beeson predicts housing prices could rise if interest rates eventually start to lower.
Godfrey views today’s interest rates as balanced, and explains how buying in the current market is all about mindset.
“The point is that if you want to buy, go buy – I would not wait for interest rates to go down … Interest rates should be around 5 or 6 perfect, and [like] Michele said, we were in la-la-land with the 2 percent interest rates,” she says.
There’s more to it than the interest rate
Beeson explains how, as a mortgage broker, she considers the holistic picture of a homebuyer’s finances far beyond zeroing in on their mortgage options. Other factors that affect homebuying ability, she points out, include household income, debt, and more.
Beeson and Godfrey may not see eye to eye on Adjustable Rate Mortgages (watch the episode to learn why!) but they do agree that owning a home is a valuable investment, regardless of market conditions.
“[Owning a home] is the way to build net worth. It is something that I love when people aspire to. [Paying] rent is tough – you’re kind of throwing it away each month. [By buying a home], you’re building equity and you’re building your life,” Godfrey says.
“Does [a home] fit into your budget? Is it what you want as a part of your long-term building of your net worth?” she continues. “Remember, you’re living in that asset. It’s not sitting in a vault – you’re living in it.”
Tune in to the latest episode of Keepin’ It Real With Nick Bailey to learn why Beeson and Godfrey – finance experts themselves – would never go through the homebuying process without a trusted mortgage lender and real estate pro by their side.
Article originally appeared on RE/MAX.com.