Mortgage Rates Dropped By The Largest Amount in 41 Years!
Mortgage rates fell to their biggest week over week drop last Thursday in 41 years. Rates ticked back up slightly following this (they’re always going to fluctuate), but I think we’re at the beginning of the decline and return to normalcy.
This is most certainly great news for people who are looking to buy a home in Sanford NC or the surrounding areas in the next year (or sooner.) Or is it?
It is only one side of the story: Higher rates have a big impact on the competition of the market. The lower the rates, the higher the competition. If you are one of the people trying to jump back into the market once rates drop, do keep in mind that you are certainly not alone. The lower the rates, the higher the competition. But the opposite is true and sellers know it.
Sellers (and builders) are far more open to negotiating than they have been in years and in some circumstances your monthly payment could remain similar to what you could have purchased the home last year.
Think about it. If you are able to secure a price drop of $10,000 and seller paid closing costs of another $10,000 you could be in a position where you have equity and the extra closing cost support to use a program like the 2-1 buy down to lower your interest rates for the first two years. For some people, that situation may be better than a 5% interest rate and having to compete, potentially entering multiple offer situations and having to pay above asking price again if the market heats back up.
These are very real scenarios to think about and although pricing and market demand is fluctuating in the short term, the big economic driving factors tell us home values are safe in Sanford NC and the surrounding areas for a long time to come. There are simply too many jobs being created here, too many people moving into their prime buying years (millennials and gen-z), and not enough houses to go around (we didn't build enough of them from 2008-present). These basic supply and demand laws will keep housing prices trending up in the long-run.
In short, you really have to run the numbers to see what makes sense for you. As you should never buy a home where you can afford the monthly payment. If you are considering moving, let me know and I would be happy to do a “Discovery Call” to break down the numbers.