When is the best time to buy a house? Depending on who you ask, you could get a variety of different answers. One person might say, “In the spring.” Another might say, “When the housing market is good.” Others might say, “When mortgage rates are low.”
Mortgage rates certainly do affect on buying trends. Potential buyers who have been thinking about house hunting may decide to take the plunge and apply for pre-approval when rates are low. While pre-approval does not necessarily lock in the current rate, it’s still a good idea to apply and find out what amount you will qualify for to establish a price range before previewing homes.
Current Buying Trends Lean Toward Higher End Homes
While mortgage rates play an important part in current buying trends, other factors are also at play. One such factor is the housing market and what’s in demand. Low mortgage rates often encourage buyers who are looking for higher-priced homes, such as luxury homes in Grandover Greensboro, to choose this time to upgrade. This also means that lower-priced homes will soon be available as current homeowners prepare to sell their homes and purchase larger homes.
First Time Home Buyers Benefit from Lower Mortgage Rates
Lower rates also put first time home buyers at an advantage. One thing first-time buyers often lack is down payment funds. Current homeowners who are upgrading have typically built-up equity in their current home that eliminates the need for a down payment on their new home. First-time buyers can often get a lower rate and avoid mortgage insurance if they put down 20%. But when rates are already low, buyers with little or no money to put down can still get a low rate and a more affordable monthly payment.
Federal Rate Cuts are Responsible for Historically Low Mortgage Rates
Why does The Fed (Federal Open Market Committee) lower interest rates on loans? The decision to lower rates is usually done to boost the economy. It encourages people to go out and purchase real estate among other things. The Fed has made several rate cuts this year in an attempt to achieve the ideal amount of economic growth. Conversely, if growth goes “too far” in The Fed’s opinion, rates will go up to balance out the economy.
This gives buyers a sense of urgency, to “strike while the iron’s hot” and finance a new home before rates go up again. Current homeowners may decide to refinance their homes to take advantage of the low rates to reduce their monthly payment or cash out some of the equity that has built up in their home.
Now is the Time to Find the New Home you’ve Been Dreaming of
With low mortgage rates available now, it’s time to stop “thinking about it” and start house hunting. Smith Marketing and Allen Tate Realtors® can help you find the home you’ve been looking for. New and existing homes are available now in some of the most highly desired areas of The Triad, such as Grandover Greensboro and other up and coming neighborhoods. Homes of all sizes and price ranges are hitting the market now, so don’t wait. Call Smith Marketing and Allen Tate Realtors® today at (336) 485-1881.