Buying a home is a major decision, but when is the best time to act? Although today’s housing market features high interest rates, experts note that there are still advantages to purchasing your new home now rather than later. For more information about this topic, we talked with Drew Aiello, Branch Manager and Mortgage Loan Officer at the Fairway Independent Mortgage Corporation in Saratoga Springs NY.
What to Know About the State of Today’s Housing Market
A recession is a temporary period of significant and widespread economic decline that affects a wide range of industries. As of Q4 2022, many financial gurus believe we are in a recession or about to enter one, and there are several indicators that back this up.
However, a recession is not a bad thing for the housing market. During our conversation, Aiello explained to us that, “Real estate always does well in a recession because rates come down and it spurs on buying, thus helping the housing market.” In other words, homebuyers can expect lower interest rates in a recession and a higher demand for houses.
Experts feel that rates will be about 1% lower by the end of 2022, and may continue to decrease in 2023 and 2024.
Why You Should Take Advantage of the Current Costs & Rates
Over the past few years, there has been a historic shortage of houses for sale, and it may take a while for the number of sellers to reach the number of buyers. As a result, lower interest rates in a recession would mean increased competition and a rise in home prices.
Aiello recommends acting now before this starts because by waiting, you may end up paying more for the same home later. In addition, you can always refinance in the next 12 – 24 months if the interest rates do decrease.
If buying a home is within your budget and beneficial for you and your family, then you should consider getting ahead of the other homebuyers who will be looking for homes in Q1 and Q2 2023.
Buying a Home Is the Best Investment You Can Make
Another reason you should buy a home now despite high interest rates is that real estate is arguably the best investment available. For example, Aiello told us to imagine a “$400,000 home with 10% down,” which is a $40,000 down payment.
“If you get 3% appreciation next year in real estate, that’s $12,000 in appreciation,” he stated. “If you put down $40,000 and get $12,000 in appreciation, it’s a 30% return on your money.”
There aren’t many other investment vehicles out there that offer as strong of a return as real estate.
Looking to Buy? Find Homes in the Capital Region
Our experienced team of real estate agents at Sterling Real Estate Group can help you get started with the homebuying process in the Capital Region. We’ll guide you through each step and ensure you find the best home for your budget.