THE BEST TIME TO BUY A HOUSE! Although it is said that one cannot predict the best time for buying a house, it is very much possible to make an informed decision with available data and information. Before buying a house, especially as a first-time homebuyer, consider critical influencing factors. These factors will help you decide on the best time to buy a home. The value and interest rates are two important factors to consider when buying a home closely. It’s not the same as buying a car and there are a lot of key considerations, This article helps you decide on the best time to buy a house based on these and other factors. Buying a home is stressful, But it’s more affordable than you think. Verify my mortgage eligibility (Feb 7th, 2023) How interest rates influence home-buying decisions When you buy a house, you take a loan from a provider after making an initial down payment and repay the loan over the period stipulated in the agreement. The rate at which you get the loan influences the overall cost of the mortgage. Interest rates directly influence mortgage costs in that the lower the interest rates, the cheaper the costs of the mortgage. If you are to service a loan at a rate of 5% instead of 7% over a long period, as is typically seen with mortgages, the 2% difference will amount to a significant difference. Because of the role that interest rates play in influencing buying decisions across all sectors, it is a tool that the government applies to influence the economy’s growth. We have established that the interest rates and buying decisions are inversely proportional in that the lower the interest rates, the higher the buying decisions. However, in translating this to land and real estate, it is critical to understand the nature of real estate. Real estate is limited, a feature that determines its inherent value. The extent of available land does not change to influence the growing population. Instead, the cost of the available land and property increases as the demand increases. The finite nature of real estate is the reason behind it being a store of value with a significant proportion of wealth stored in real estate globally. Verify my mortgage eligibility (Feb 7th, 2023) Reduced interest rates encourage buying decisions, and the value of homes increases with improved demand. Thus, when interest rates are reduced, the value of homes increases. This is currently the situation of the real estate market as the value of homes is at a historic high due to the reduced interest rates. How home values influence buying decisions Home value directly influences the mortgage costs as it is the principal amount to which the interest is applied. Because home values are central to buying decision, the latter moves in the same direction as the former. The higher the value of homes, the lower the interest in buying. The lower the average home values, the higher the interest in buying homes. As interest in home purchase increases with the reduced home values, interest rates are adjusted accordingly. Thus, low home prices are associated with high-interest rates and vice versa. This is so as to encourage home-buying decisions, even with the increased home value. Verify my mortgage eligibility (Feb 7th, 2023) The current market situation is that of increased home value and reduced interest rates. Market predictions indicate that the situation is soon to change in favor of higher rates and reduced home value. With the rates and house prices bound to change soon, now is a good time to consider your buying decisions and conclude finally. As a potential buyer, you should act fast in light of the changing market variables. Consider what the changing interest rates and house prices will mean for you. Lower house prices could qualify you for bigger purchases but with higher maintenance costs of the loan. High house prices would mean that you need more money for the down payment. We should also mention the influence of mortgage rates on other rates such as credit card and auto loans. The relationship between interest rates across the board is linear. As such, with reduced rates, you could have more money to save towards a down payment. Even if you are not still ready to buy your house, you should understand how critical this period and the changes of the nearest future are in the real estate market. On a final note, remember to consider other factors such as location, demographics, and possible future credit score changes. Show me today's rates (Feb 7th, 2023) Coastal Pacific Lending, Inc. Click to Call or Text: (888) 214-8618 This entry has 0 replies Comments are closed.