Homebuyers’ quandary: to wait or not to wait for lower mortgage rates

Currently, mortgage rates are around 6.9%, significantly reduced from the near 8% peak in late October, the highest in 23 years. Economists anticipate these rates to drop further later in the year, which could increase buyer competition due to more attractive financing options. However, this could also lead to higher home prices.

Danielle Hale from Realtor.com suggests buying now could be advantageous as it might avoid future bidding wars, and buyers could potentially refinance if rates drop. The backdrop is a housing market that has seen significant price increases and a nearly 44% rise in median sale prices for previously occupied homes from 2019 to 2023, alongside a persistently tight inventory despite more homes being listed compared to last year.

Prospective buyers like Gagan Hegde and Shelby Rogozhnikov illustrate different strategies; Hegde chose to buy immediately due to the competitive market, while Rogozhnikov plans to wait, balancing mortgage rate trends with personal circumstances. If you choose to buy now, there have been incentives recently, like flexibility from sellers in some markets and new homebuilders have started to offer incentives like price cuts and special financing to attract buyers amidst these challenging conditions.

Source: AP News