Author

Shelly Salas

With inflation on the rise, everyday costs are soaring. This includes essentials like groceries and gas, and it’s becoming more expensive to maintain the lifestyle we had even a year or two ago. This economic shift has many of us asking important questions about our living situations: Should we continue renting, start renting, or is it time to buy a home? While interest rates are indeed higher than they used to be, the decision isn’t just about the rates. There are other critical factors at play that you should consider when navigating the real estate market.

It’s crucial to understand the current state of the real estate market before making decisions. Recent data shows significant changes. For example, in April, 22.4% of homes on the market had price reductions, the highest rate in six years. This indicates a higher inventory of homes and fewer buyers, pushing sellers to reduce prices to attract attention. As a potential homebuyer, this means you might have more negotiating power than in a more competitive market.

On the other hand, if you’re considering renting, be aware that rental prices have increased. Nationwide, rents are up 3.6% from last year. This rise in rent is driven by higher demand as more people choose to rent instead of buy, often due to concerns over interest rates.

If you have decided on owning a home, the decision of whether to buy now or wait for interest rates to decrease is a critical one. Experts suggest that purchasing a home now might actually be more beneficial despite the current higher interest rates. The rationale behind this is that you can always refinance your mortgage when rates drop in the future. Additionally, buying now means facing less competition, which gives you more negotiating power and potentially a better price, especially if you have chosen a reliable real estate team to assist you in the process.

Meanwhile, waiting for lower interest rates could lead to a more competitive market. As rates decrease, more buyers will enter the market, driving up home prices and reducing your negotiating leverage. The homes that you could consider purchasing now might become out of reach later due to increased demand.

As you evaluate your housing options, it’s important to weigh the current market conditions, your financial situation, and your long-term plans. If you choose to buy, know that the current market offers unique opportunities for negotiation that might not be available once interest rates drop and competition increases. Renting might seem like the safer short-term option, but consider the long-term benefits of owning your own home, building equity, and having the stability that homeownership provides.