Interest Rates Are Being a Little Rude Right Now. Should You Still Buy a House?
If you’ve been thinking about buying a home in Pierce County, or anywhere around the South Sound, there’s a pretty good chance interest rates have made you wonder if you should wait.
Fair.
Your mortgage rate can make a very real difference in your monthly payment and buying power. But the interest rate alone doesn’t tell us whether buying a home right now makes sense for you.
And no, I’m not going to tell you that “it’s always a great time to buy!” just because I’m a Realtor.
Sometimes buying now makes sense.
Sometimes we can adjust the numbers to make it make sense.
And sometimes the answer really is: not yet.
Your Interest Rate Is Only One Part of the Equation
When we’re figuring out whether buying a home makes sense, the interest rate matters a ton but it definitely isn’t the only number we should be looking at.
We also need to think about your purchase price, down payment amount, estimated monthly payment, closing costs, available cash, financing options, and how long you expect to stay in the home.
And then there’s the actual housing market.
What are homes selling for in the neighborhoods you like? How much competition are you facing? Are sellers negotiating? Are there opportunities to ask for closing costs or other concessions?
Those things can change the equation considerably.
There May Be Ways to Make the Numbers Work Better
This is a reason I’d rather have someone talk to me before they just decide they can’t afford to buy. You may surprise yourself!
Depending on the house, your financing, and the current market, there may be different ways to approach the numbers.
A Lower Purchase Price
Maybe the house at the very tippy-top of your budget doesn’t work with today’s payment, but sometimes something slightly lower does. I’m not saying settle on where you call “home,” but I am saying there may be other ones out there you haven’t seen that you’ll love just as much!
Seller-Paid Closing Costs
We may be able to negotiate for the seller to pay toward your allowable closing costs in some scenarios. What you can use those contributed closing costs to depends on the loan program and lender requirements. That’s why having a trusted lender is so helpful! They can help us figure it all out.
A Rate Buydown
It might be possible to use some of those seller concessions toward a temporary or permanent rate buydown, depending on the lender and loan type. Your lender will be able to say what makes the most sense for your specific transaction.
Different Financing Options
Having a trusted lender involved early is incredibly helpful. They can walk you through different loans, down-payment options, and rate structures you may qualify for. Then we can look at the bigger picture together!
None of these options are guaranteed, but some might be the perfect solution. That’s why I think it’s so important to not make the assumption that it’s not the right time for YOU to buy a home based on the interest rate headlines.
What If Buying Right Now Doesn’t Make Sense?
Then I’ll tell you that.
A buyer meeting isn’t a commitment to buy a house.
It’s a time we can take a look at the bigger picture and realize that waiting a year, saving more money, paying something down, or simply watching the market for a bit puts you in a better position. And that’s still a productive conversation.
It helps you have a plan, and when the time comes, you aren’t starting from step one.
You Don’t Have to Be “Ready” to Talk to a Realtor
This is the biggest thing I want future buyers to know.
You don’t need to know exactly where you want to live, what your perfect price point is, or have every other single detail figured out.
If buying a home sometime in the future is a goal of yours, that’s enough.
We can figure out where you are now, where you’d like to be, and what needs to happen to get you there. And when it’s time to dig into the numbers, a lender can help you understand exactly what the financing will look like for you.
Sometimes buying now makes sense.
Sometimes it doesn’t.
Sometimes a conversation is just the place to start.
Real Estate Terms Don't Have to Be Confusing
The home buying process comes with plenty of unfamiliar terms, but understanding them can help you feel more confident every step of the way.
Have questions about buying a home in Tacoma or anywhere in the Puget Sound area? I'd love to help.