Why Interest Rates Should Not Dictate Your Home Buying Decision

Steve Bell
Posted by Steve Bell
Updated on
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Published in Real Estate 101

One of the main reasons a lot of buyers today have been hesitant to purchase a new home is due to rising interest rates. With interest rates in the low 7’s for a 30-year fixed, gone are the days of 2.5’s during Covid. It is common belief that lower interest rates translate to better deals, and higher interest rates lead to increased cost. While there is some truth in this, only focusing on the rates themselves can get in the way of the main goal you had in the first place. Here is why interest rates should not dictate your home buying decision. 

If you aspire to own a home or buy a new one in 2024 but interest rates are holding you back, then maybe you need to look at the bigger picture. Home prices will only continue to increase with time, as they always have, meaning you could be missing out on years of maximizing your investment. Even if the rates do drop, by the time that happens the home you could have purchased at a lower price has shot up. 

The best time to buy is always now, do not wait for the “perfect time,” because there is no time like the present. If you factor out the interest rates and think about your financial situation, location you are interested in, and the market trends of that area, would this change your decision in any way? For example, here in South Florida, the population is only continuing to grow and does not show any signs of slowing down. With this knowledge wouldn’t it be best to try to get in now rather than later? I believe so.

Additionally, trying to predict the market is tough task. No one ever knows what is going to happen with the economy or what the government will decide to do. If you sit back and wait for rate decreases, time will continue to pass while you still pay rent on someone else’s property. There are too many factors that go into what the rates will be that are out of your control. 

Most South Florida homeowners who have recently bought in the last few have seen a quick turn around on their initial investment. While you may be paying more in interest, you are essentially making more money in the long run as you build equity in your home. Homeownership is a long-term investment, so why look at it any other way? 

In conclusion, the current interest rates should not dictate your home buying decision. When you lay out all the other factors on why you should buy now and throw away the thought of fluctuating interest rates, the picture gets a lot clearer. If you feel like you are ready to purchase a home today, contact us here and we can lead you in the right direction.

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