Interest rates are higher than they’ve been in some time, but that shouldn’t scare you away from buying a home right now. In fact, there are plenty of good reasons to consider buying, right now. Here are seven reasons why you should buy a home when interest rates are high.
Lower home prices
There was a time when some sellers were getting multiple offers for homes, and oftentimes they were above asking price, even in markets that don’t typically see that type of buying frenzy. That seems to have cooled. With higher interest rates, it’s likely fewer buyers are willing to overbid on a home and drive up the price. Now, some buyers can’t afford as much home, so home sale prices are going down.
Help with closing costs
Sometimes, with a higher interest rate, sellers are more likely to help with closing costs. That wasn’t necessarily the case when rates were low, and the market was hot. With lower interest rates, sellers had the advantage. They didn’t have to give as much, because there were oftentimes several buyers interested in their home.
Room for negotiation
There may also be more room for negotiation now. When rates were low, there was obviously more competition, and in many cases that meant few sellers were willing to negotiate. Since the market’s cooled off, it means there’s once again room for negotiation when buying a home. If you’re wanting to buy, that could be to your advantage.
Less risk for buyers
When the mortgage rate was low, competition was so fierce in some markets that buyers were sometimes willing to waive contingencies. They were looking for a way to get noticed by the seller. However, in some cases that meant waiving inspections and appraisals, which can be risky for buyers. In many markets, that’s no longer the case, and there’s less risk if you’re trying to get a home.
It’s no secret that in many cases there’s less competition for buyers. If you see a home you really want, you probably have a better chance of getting it, and possibly for a lower price. That’s another good reason to buy a home right now.
A higher interest rate also means more choices for buyers. As we just mentioned, there are likely fewer people putting in offers. That means less competition, because there are probably fewer people who qualify for a mortgage, pricing some out of the market. While some homes are still selling quickly, you’ll now see many homes staying on the market longer, which means more choices for buyers.
Opportunity to re-finance
While all of these are good reasons to buy when interest rates are higher, remember you can always re-finance your rate later. Even if you need take a higher rate now, you can opt for a variable rate, and hope the rate goes down in the future.
Thinking about buying a Chicago condo? Check out today's newest condos to hit the market:
Posted by Leo Clark. on
Leave A Comment