Should you postpone a home purchase or sale until the mortgage rates go down?

I am sure everyone has their own theory on this topic, but i like to stick to the numbers and historical data. We have many buyers and sellers waiting on a sideline for mortgage rates to go down, hoping that their mortgage payments will go down a bit. However, you should do a proper calculation before you park the buying/selling thought on a bench.

Here is your "math homework":)

Step 1. How much realistically do you think rates will go down? 0.25%, 0.5%, 1%? My advice is to calculate a best-case scenario AND the worst-case scenario.

Step 2. Compare those numbers with a current mortgage rate and see how that will impact on your monthly payment. 

I am sure you will see some difference, but the next step I’ll give you to do, might show you that waiting for the rates to go down is not always a good thing.

As I mentioned above, there are MANY buyers still out there waiting for the same. Once the mortgage rates go down, the supply and demand balance (or should i say disbalance) will be affected again, and that will for sure reflect on the numbers. The prices WILL go up and it will be MORE than what that interest rated decrease is!!!!

We had that trend just recently, at the beginning of this year. We had quite few buyers out there and still not enough listings, multiple offers were back, and price went up, of course. The moment that the banks raised fixed mortgage rates, everything stopped again...and prices slightly went down...again.

This yo-yo effect has been present in all volatile real estate markets. 

So, the most important step is:

Step 3 is to calculate mortgage payments for a property you would like to purchase at this moment with current mortgage rate vs. projected mortgage rates and projected home prices!!

Rude awakening, is it?

If you are buying and selling at the same time, we need to do different calculations, so reach out to me and I will gladly help you determine when would be the best time for you and what should be the proper order. Should you buy or sell first.

Have a wonderful day ahead,