The Number One reason given for not buying a house in recent years was: “I can’t afford it.” Low inventory was the rule, and along with low inventory came multiple offers and high prices.

But the Fed started raising interest rates late last summer, and now the new reason for not buying is: “I STILL can’t afford it.” Even though prices have dropped, high interest rates have made mortgages so expensive that a simple break in price doesn’t seem like it’s enough.

So, it seems like the answer is that you should wait…again.

Or is it?

Here are six reasons to abandon the wait-and-see posture and buy your next house now:

  1. Consider what will happen when interest rates normalize again: All of the other wait-and-see buyers will return to the market and bid the prices right back up. And since no one thinks interest rates will return to the 2s and 3s of the good old days, you’ll be competing with a “normalized” rate of maybe 5 percent. Not ideal.
  2. Although current price reductions aren’t mammoth, they make a significant difference in your monthly payment and therefore the speed with which you can pay off enough of the loan to get rid of any mortgage insurance you would be paying. And that savings, on most loans, IS significant.
  3. And if you don’t think the price reduction is all that helpful, how about cold hard cash paid in discount points to lower that troublesome interest rate? Wait, does that mean a seller will, essentially, turn the clock back on a buyer’s mortgage rate? Answer: YES! Sellers are frequently paying for rate buydowns to make the home more attractive to buyers. It isn’t because they are feeling charitable; it’s because there is no longer a crowd of bidders on their front porch.
  4. Let’s look at that reduced purchase price again. The amount you borrow to buy a house is permanent – it only gets lower if you pay it down. So any savings here are Permanent. But mortgage rates are temporary. It may be called a 30-year mortgage, but every time the market shifts (and it does so frequently), interest rates fluctuate, making it possible to refinance your mortgage to a lower rate. So, while mortgage rates aren’t great now, they won’t be that way forever. You can enjoy your reduced debt now and later refinance that debt at a much better rate. Have your cake, eat it, too.
  5. Last summer, at your highest dollar, the number of houses available for you was so paltry and so sad-looking that you were better to stay where you were. Now, with a significantly more houses on market, you have a chance to get something closer to that hoped-for house.
  6. A real estate investment will always have value because people will always need a place to live. If you own a home already, now’s a great time to buy a rental and take in a passive income stream with tax breaks. If you rent, now is a great time to stop paying someone else and start paying yourself!

Let’s begin with a conversation about your goals and your plan to achieve them. There may be paths forward that you don’t even know are available to you.

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