With the sharp rise in interest rates starting in 2nd Quarter of this year today’s so many of today’s buyers decided to put their home searches on pause and see if they could time the market. In reality this will probably not work for the vast majority of buyers who are hoping to buy in 2023.
Here is a real time line from a new construction home that was bought in July of 2000 – just over 22 years ago. Their initial interest rate on their mortgage was 8.27%.
A few years later, 5/18/01, they refinanced to: 7.02% – meanwhile their home was slowly appreciating in value.
The interest rates went down again and they refinanced in 1/23/03 for a rate of 6.13%.
Almost 6 months later they refinanced again to a rate of 5.37% in 7/21/03.
Their final refinanced was on 10/26/12 for a rate of 3.55%!
So when your real estate professionals – mortgage originators/real estate brokers – tell you to “Marry the House and Date the Rate” this is what we mean. Find the best home that fits your current needs at the current interest rate that you qualify for. Keep your eyes on the interest rates and when it makes sense – refinance! Over time home prices appreciate and with rental prices still pretty high you would be better off over time to have a home that you are paying off instead of paying off your landlord’s mortgage, property taxes, HOA fees, etc.
So go out and find your “Almost perfect home for your current needs” and date that rate until it lowers down. If rates don’t go down you are ahead of the game since your rate will be lower and when they do you will have less of an outstanding balance and some equity built up. Like a good marriage – finding the right home and rate, may take some time – but in the long run it will be worth the wait.