SHOULD YOU WAIT OR BUY NOW? UNDERSTANDING MORTGAGE RATES AND MARKET TRENDS
Are you sitting at home, wondering what the Federal Reserve’s next move will be? Are you holding off on buying or selling because you’re unsure what mortgage rates will do next? If so, you might be chasing a moving target.
I’ve been navigating shifting markets for over two decades, helping buyers, sellers, and investors make informed real estate decisions with clarity and confidence. Waiting for the “perfect” time can often mean missing great opportunities. Let’s break down what’s happening with mortgage rates—and whether making a move now might be in your best interest.
HOW MORTGAGE RATES REALLY WORK
Many people assume that mortgage rates move up or down in direct response to the Federal Reserve (the Fed) adjusting interest rates. In reality, mortgage rates follow the 10-year treasury yield, not the Fed funds rate. Although the two have a relationship, they don’t always move in sync.
Here’s where things get interesting: Analysts predict we could see a Fed rate drop of 50 basis points over the next year. However, this projection is based on several variables, including:
* Inflation trends
* Government spending and policies
* Consumer confidence and spending habits
Even if the Fed lowers rates, it doesn’t necessarily mean mortgage rates will also drop. Depending on market conditions, rates could still go up. So, what does this mean for your next real estate move?
THE 4 SCENARIOS: WHAT WAITING VS. BUYING NOW MEANS
Deciding whether to buy, sell, or wait helps break down different possible market outcomes. Let’s explore four scenarios:
1. RATES DROP & HOME PRICES DROP
* If you buy now, you can refinance later at a lower rate, but your loan amount is higher.
* If you wait to buy, you’ll benefit from lower rates and home prices, resulting in a lower monthly payment.
2. RATES INCREASE & HOME PRICES DROP
* If you buy now, you lock in today’s rate and avoid future increases, though you might see temporary home value dips.
* If you wait to buy, you could face a higher mortgage rate, making your monthly payment more expensive. You might not even qualify for the home you want.
3. RATES DROP & HOME PRICES INCREASE
* If you buy now, you secure your home at today’s price, build equity as values rise, and later refinance at a lower rate.
* If you wait to buy, you miss out on home appreciation and now need a larger loan to afford the same property.
4. RATES INCREASE & HOME PRICES INCREASE
* If you buy now, you benefit from property value appreciation while keeping your current interest rate.
* If you wait to buy, you face higher monthly payments and a larger loan amount. You may even be priced out of your ideal home.
WHAT THIS MEANS FOR SELLERS
If you’ve been delaying selling because you’re waiting for lower interest rates to bring in more buyers, consider this:
* Inventory remains tight – demand for homes in Vancouver, WA, and Portland, OR, is still strong.
* Lower rates don’t always mean a flood of buyers – if rates drop, competition among buyers will increase, but so could home prices.
* Now might be your best window – with market uncertainty, taking action today could put you in the strongest financial position.
THE BOTTOM LINE: SHOULD YOU ACT NOW?
Instead of waiting for the “perfect” moment, let’s focus on what’s best for you. Whether you’re buying, selling, or investing, having a personalized real estate strategy will ensure you make the smartest move for your financial goals.
I’d love to help you navigate this market with clarity and confidence. Let’s set up a time to discuss your options and build a game plan that works for you. Click here to connect with me.
