3 ms·

What is the general recommendation for buying a house in this economic climate? Hold off until interest rates go down or just buy if you are ready and not time

by ra7 4y ago

What is the general recommendation for buying a house in this economic climate? Hold off until interest rates go down or just buy if you are ready and not time the market?

lotsofpulp 4y ago
Same as everything else. If you like it, you can afford it, and you think it will provide you sufficient utility relative to the price you pay (this would be based on your available options), then you buy it.
hedora 4y ago
Assuming you plan to live in the house, I wouldn't try to time it. Inflation could cause the price of houses to skyrocket (and the value of your down payment to tank), and interest rates will certainly increase for the next few years. Current prices reflect people's best guess as to which way things will move. If you want to buy as an investment, I suggest diversifying as much as possible. If you already have enough assets to tolerate the additional risk and can still get a sub-5% mortgage, then maybe buy an investment property right now (in expectation, it's still free money at those rates, and, even if the market tanks, the price of the house will probably bounce back in the long term).
dominotw 4y ago
noone knows, like everything else in the economy atm. Buyers and sellers are at a stalemate watching what happens next.
richiebful1 4y ago
I just bought a house and it seems like a smart investment so far. I am renting out half the house, which pays for almost all of the mortgage. Since rent has been going up about as fast as the total cost of a mortgage has, it doesn't really affect my decision.
oramit 4y ago
Real estate is very local and housing is a necessity so its not a purchase you can think about like a pure investment. I am finally in a place where I am looking to move to a house (currently in a condo) and am very happy that rates are increasing right now. The local real estate market has slowed considerably and I've watched multiple listings of mediocre houses with huge price tags sit for a month before being quietly delisted. It seems like sellers are just now realizing that the days of one weekend of open house followed by multiple competing offers are over. The overpriced flips are getting hammered right now. Well priced properties are still moving, but it will take time for the new reality to filter through the market. Personally I'm giving it about a year to see where things are next summer. I'm hopeful that the interest rate increase causes prices to drop but real estate prices (like wages) are sticky. Prices may come down, but sellers could also just decide to hold off and hoard. Hard to tell.
- ra7 4y ago
  I'm pretty much in the same situation right now. Inflated prices are already dropping where I live, but I'm afraid the more I wait the higher interest rates will be since that's fairly guaranteed to happen according to the Fed.

by ra7 4y ago

What is the general recommendation for buying a house in this economic climate? Hold off until interest rates go down or just buy if you are ready and not time the market?

lotsofpulp 4y ago

Same as everything else. If you like it, you can afford it, and you think it will provide you sufficient utility relative to the price you pay (this would be based on your available options), then you buy it.

hedora 4y ago

Assuming you plan to live in the house, I wouldn't try to time it. Inflation could cause the price of houses to skyrocket (and the value of your down payment to tank), and interest rates will certainly increase for the next few years. Current prices reflect people's best guess as to which way things will move. If you want to buy as an investment, I suggest diversifying as much as possible. If you already have enough assets to tolerate the additional risk and can still get a sub-5% mortgage, then maybe buy an investment property right now (in expectation, it's still free money at those rates, and, even if the market tanks, the price of the house will probably bounce back in the long term).

dominotw 4y ago

noone knows, like everything else in the economy atm. Buyers and sellers are at a stalemate watching what happens next.

richiebful1 4y ago

I just bought a house and it seems like a smart investment so far. I am renting out half the house, which pays for almost all of the mortgage. Since rent has been going up about as fast as the total cost of a mortgage has, it doesn't really affect my decision.

oramit 4y ago

Real estate is very local and housing is a necessity so its not a purchase you can think about like a pure investment. I am finally in a place where I am looking to move to a house (currently in a condo) and am very happy that rates are increasing right now. The local real estate market has slowed considerably and I've watched multiple listings of mediocre houses with huge price tags sit for a month before being quietly delisted. It seems like sellers are just now realizing that the days of one weekend of open house followed by multiple competing offers are over. The overpriced flips are getting hammered right now. Well priced properties are still moving, but it will take time for the new reality to filter through the market. Personally I'm giving it about a year to see where things are next summer. I'm hopeful that the interest rate increase causes prices to drop but real estate prices (like wages) are sticky. Prices may come down, but sellers could also just decide to hold off and hoard. Hard to tell.

ra7 4y ago
I'm pretty much in the same situation right now. Inflated prices are already dropping where I live, but I'm afraid the more I wait the higher interest rates will be since that's fairly guaranteed to happen according to the Fed.