San Mateo County Market Update September 2024

What Mortgage Rate Are You Waiting For?

You won’t find anyone who’s going to argue that mortgage rates have had a big impact on housing affordability over the past couple of years. There has been positive change though, and more hope is on the horizon. Rates have actually started to come down, and recently they hit the lowest point we’ve seen in 2024, according toFreddie Mac (see graph below). If you’re thinking about buying a home, that may leave you wondering: how much lower are they going to go? Here’s some information that can help you know what to expect and why you might not want to wait too long..

Many potential buyers are holding off on purchasing a home, anticipating that mortgage rates will drop even further. The common belief is that lower rates will make homes more affordable and provide better financing terms. This wait-and-see approach is based on the hope that a lower rate will save money over the life of the loan and make homeownership more attainable.

That wait-and-see approach might not be a good idea to save money

1. Market Conditions: While you might be waiting for lower rates, it's important to note that prices for condos and townhomes have already decreased possibly to the lowest point we've seen, however HOA fees have increased. This means that even though home prices are lower, the total cost of ownership could still rise. The prices of single-family homes have also been steadily increasing over the same time period.
2. Reaching the Bottom: We’ve likely seen the bottom of the market in terms of home prices. Waiting further might result in missing out on the current leverage for negotiating a good deal. As rates drop, competition is likely to increase, which could drive up home values and reduce your negotiating power.
3. Increased Competition: As rates decline, more buyers will enter the market. This increased demand could lead to higher home prices and a more competitive environment, making it harder to secure a favorable deal.
4. Opportunity Cost: By waiting for rates to drop further, you might miss out on other benefits of buying now, such as current market conditions, property availability, and negotiation opportunities. Additionally, you can always refinance later if rates drop significantly after your purchase, but delaying now might cost you more in terms of missed opportunities and higher competition.

If you’ve been holding off on buying a home because of higher mortgage rates, it’s essential to evaluate whether waiting is the best strategy for you. While a lower rate could be beneficial, the current market offers opportunities that you might miss if you wait too long. Prices have already adjusted, and increased competition could make future buying conditions more challenging.

To make the most of the current market and get personalized advice on the best timing for your purchase, connect with Rumana today. She can provide expert insights, help you navigate the market, and ensure you’re well-informed about the best time to make your move.