If you’ve been feeling discouraged by the current real estate market or the constant media chatter about rising prices and an impending crash, there’s a silver lining you might not have considered. For first-time homebuyers, the market is starting to shift in your favor. Here’s why now might be the perfect time to make your move.
Interest Rates Are Finally Dropping
Recently, we’ve seen a significant and welcome change in mortgage interest rates. Just last week, rates dropped noticeably. For instance, where rates hovered around 7% a week ago, some buyers are now securing rates as low as 6.1%. This drop in rates is more than just a number—every 1% decrease in interest rates can increase affordability by 12%, giving buyers much more bang for their buck.
Mortgage rates are currently at a 14-year low, and we’ve observed a recent half-percent reduction. On a $400,000 loan, this could mean saving $133 per month on your mortgage payment. Alternatively, this reduction could increase your purchasing power by $25,000. In addition, the housing supply has grown by 7.4% compared to last month, which is driving sellers to be more motivated and open to negotiations.
The Market Is Shifting Toward Buyers
The combination of falling interest rates and rising inventory is creating a balanced market that strongly favors buyers. We’re now seeing the highest levels of inventory in four years, which has resulted in price reductions on 40% of the homes currently on the market. For buyers, this means more negotiating power—not just on the price of the home, but also on other factors like mortgage rate buy-downs, concessions, and repairs.
With these conditions, buyers have a greater ability to secure better deals and reduce their monthly payments. As rates continue to decrease, more potential buyers are entering the market, taking advantage of the improved affordability.
Why Now Is the Time to Act
While the market might not seem ideal for everyone, the current trends are making homes more affordable than they’ve been in recent years. If you’re considering purchasing a home in the next 12 to 18 months, now is the time to start planning. Rates are expected to fluctuate but generally continue to drop, which could lead to increased competition for available homes.
By acting now, you can take advantage of the current conditions, secure a favorable mortgage rate, and potentially save thousands over the life of your loan. With more inventory on the market and sellers more willing to negotiate, there’s never been a better time for first-time homebuyers to step into the market.
Don’t miss out on this opportunity—start planning your home purchase today and take advantage of these buyer-friendly conditions.
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