Is now the right time to enter the real estate market? If you’re like most prospective homeowners, you find yourself asking this question on a regular basis. Although there’s no set-in-stone answer on when it’s time to enter the market, there are some factors you can consider.
Early 2023 predictions of mortgage rates ending the year at 5% aren’t all in vain. In fact, Texas Republic Bank offers a competitive mortgage rate that you might want to take advantage of.
In this article, we’ll explore mortgage rate fluctuations over the past few years, give you some criteria to apply to your own situation, and highlight how you can leverage a competitive mortgage rate.
Understanding the Past Few Years
The housing market experienced a dramatic flip from 2020 to 2023. In 2020 and 2021, mortgage rates dropped to historic lows at 2.68%. This doesn’t mean that all mortgage applicants received this rate. Instead, the average rate in this timeframe was around 3.25%. Now, jump ahead a couple of years to September 2023, and rates are lingering around 8%.
Weighing the Factors
When should you enter the market? There are numerous factors that you should consider before entering the market. Despite what you might believe, entering the market during periods of high-interest rates isn’t a bad move. Let’s break down some important factors:
- Supply vs. Demand – High interest rates lower demand. More potential homebuyers are holding off on purchasing in hopes that rates will drop. When they do drop, there will be a buying frenzy with fewer houses on the market.
- Loan Type – There are different types of real estate loans, all of which hold different interest rates. If you are just tracking the 30-year mortgage rate, you might miss out on an opportunity tosecure a lower rate.
- Future Market Conditions – Mortgage rates won’t stay high forever. Instead, the market goes through highs and lows on a regular basis. Securing a mortgage now means you have the ability to refinance down the road.
- The House – If you find your dream home, are you really willing to pass it up because of high-interest rates? There’s no telling if you will find a home that compares.
These four factors can give you clarity on if now is the right time to purchase a home. If you are still confused, reach out to a loan expert.
Texas Republic Bank’s Competitive Mortgage Rate
Lenders like Texas Republic Bank understand how frustrating it can be for prospective homebuyers who lose purchasing power with high-interest rates. This is why they offer a plethora of mortgage options, with competitive rates designed to combat today’s market conditions.
Working with the right lender allows you to enter the market even with higher-than-normal interest rates. Especially as many mortgage experts describe 2020 and 2021 rates as a fluke, rates most likely will not drop that low again for years. Reach out to a team member today to see how you can obtain a competitive market rate, even during these turbulent periods. Now might be the perfect time to enter the market with the right lender on your side.
Download the article:To Buy or Not to Buy