The Best Time To Buy Is When Interest Rates are High

Interest rates are a hot topic of conversation in the housing market. While low interest rates are traditionally viewed as the best time to buy a house, smart home buyers are now taking a closer look at the impact higher interest rates have on the purchase of a home. Here are 4 reasons to consider the purchase of a home when interest rates are high.

1. Home Prices Are Stable or on the Decline

When interest rates rise, home prices tend to remain stable or even decline in certain areas due to decreased demand. Year-over-year home prices can drop up to 3-5% when average interest rates are higher than 5%. Home buyers who time the market and purchase a home when rates are high have the opportunity to purchase a home at a discounted price.

2. Lower Closing Costs/Loan Origination Fees

When interest rates are higher, lenders incentivize buyers with lower closing costs and loan origination fees. Lenders understand the competitive market of today’s environment and offer incentives to help increase their market share and entice buyers to purchase. Loan origination fees are negotiable, so it’s worth inside to ask for a discount.

3. Sense of Urgency

When interest rates are high, buyers often feel a sense of urgency. This can lead to a faster purchase process and fewer hurdles along the way. In some cases, buyers will close on the purchase of a home before the high interest rates kick in—saving them hundreds or thousands in the long-term.

4. A Leverage for Future Negotiations

If you purchase when interest rates are high, you can leverage the market in the future to negotiate on the sale of your home at a later date. This means that if rates drop in the future, you can find a buyer willing to pay top dollar in order to take advantage of the lower interest rates.

No matter what your home buying goals are, now is an ideal time to take advantage of high interest rates and purchase a home. And if you need help buying or selling a home, James Johnson is the best resource for you. James has more than a decade of experience in the real estate industry and can help guide you in making the right decisions.