Rising interest rates (the highest we've seen in 21 years) mixed with lack of supply of home inventory, as many homeowners are unwilling to put their homes on the market and give up their existing low mortgage rates, has a lot of people sitting on the sidelines to make any sort of real estate move. If you’re like millions of others, you’ve held off on purchasing a home, hoping that interest rates drop, or more home options become available to chose from...
The reality is, even with these two unfortunate factors of temporarily higher rates and lack on inventory, homes are STILL appreciating in overall value in Denver Metro. So the question is, should you buy a home in 2023?
The answer for most people is YES, as long as you can afford it.
You Can’t go Back in Time
Buying a home back in 2021 or 2022 might have cost a lot less with interest rates in the 2% - 4% range. But we can’t go back there. Prices won’t reverse, and no one has a time machine to go back in time.
So instead, it’s time to take control of the future. What you can do is lock in today’s prices by purchasing at a monthly mortgage payment you can afford. When interest rates drop again (hopefully to the 5% or 6% in the near future) you can refinance, lock in the lower rate, and sit comfortably with an even lower mortgage payment than yesterday.
That’s not to say we will ever be able to snatch up those crazy-low pandemic level interest rates ever again. That was a world crisis we endured, after all...
Today Sellers are Offering MAJOR Incentives to Get You to Submit an Offer
Not only are 25% of sellers forced to reduce the price of their homes for sale, from it's original list price, to keep buyers interested, they are offering major cash incentives!
Ever heard of a 2-1 interest rate buy down? Sellers are offering buyers cash at closing ton buy down their interest rate -2% in the first year and -1% in the second year, significantly changing their buying power in this market!
Sellers are also offering cash to cover buyer's closing costs, so all they are responsible for at closing is their down payment.
Many if not ALL of these incentives, offered by sellers today will go away the minute interest rates drop again. Why? Because when the rates drop, milllions of buyers sitting on the sidelines will head back into the market, causing competition, and sellers will be at an advantage once again - no need to offer incentives for buyers to offer on their home.
You can Refinance your Mortgage
Even if you have to take higher interest rates than you anticipated in 2023, you can refinance the mortgage in the near future. This is because interest rates won’t stay high forever; eventually, they will come down, even if it takes a few years.
You’re Investing in your Future
When you buy your home, you’re investing in your future. Real estate goes through cycles, but overall, it appreciates. Which we seeing as true facts with the data, today. Even with higher interest rates today, you’ll see a return on your investment if you keep the home long-term (don't try and sell within the first 2 years).
Now could be the perfect time to get your foot in the door in a fast moving market where conditions are not always favorable to buyers. Even if it’s not the home you’ll live in for your lifetime, as long as you stay there for three to five years, you will see a return on your investment.
If you want to learn more about the pros of being a buyer in this 2023 market, contact me today, and let’s discuss your options.