Why Now Is the Perfect Time to Buy a Home: Interest Rates Are Down and Prices Are Expected to Rise
If you’ve been thinking about buying a home or investing in real estate, now might be the perfect time to take the plunge. Several key factors, from interest rates to market trends, make this an opportune moment to buy. Here’s why:
Interest Rates Are Falling
September 18, 2024, the Federal Reserve made a significant move by cutting interest rates by 50 basis points—the first decrease in four years. This drop signals more good news ahead, as policymakers are projecting another half-point cut by the end of the year, followed by further reductions through 2026. What does this mean for you as a homebuyer? Lower interest rates often lead to more favorable mortgage rates, which can make a huge difference in your monthly payments.
In fact, we’re already seeing the impact of declining rates. Over the past 12 months, the interest rate on a 30-year fixed mortgage has fallen from an average 7.28% to 6.125%. For a home priced at $450,000, this change results in monthly savings of $234—a substantial reduction in housing costs.
Home Prices Are Expected to Rise
While interest rates are heading downward, home prices are projected to climb in the near future. If you’re considering waiting, it’s important to keep in mind that prices are likely the lowest they’ll be for some time. According to the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR), home prices generally rise year over year, and after seven of the last eight presidential elections, prices increased the following year.
This year is an election year, and historically, real estate trends show that sales prices often rise after an election. With pent-up demand from recent higher interest rates, 2025 is expected to bring even higher sales prices. Acting now allows you to take advantage of current price levels before they inevitably climb.
Less Competition During the Election Period
Election years tend to see a dip in homebuying activity, particularly around November, as many people prefer to wait and see how the political landscape evolves. This creates a unique opportunity for serious buyers. With fewer competitors in the market, you may have more leverage when negotiating and an easier time finding your ideal home.
Moreover, history shows that home sales tend to rise after elections, as buyers who had been holding off return to the market in greater numbers. In fact, home sales have increased following nine of the last eleven presidential elections. The only exception in recent memory was during the 2009 housing market crash.
The Perfect Window of Opportunity
All of these factors create a rare opportunity for buyers. Falling interest rates mean your mortgage could cost less in the long term, while current home prices are expected to be the lowest they’ll be before demand pushes them up again in 2025. With less competition during this election year, now may be the best time to secure a new home or real estate investment.
If you’re considering making a move, don’t wait too long. Take advantage of the current market conditions, and reach out to us to explore your homebuying options. Lower rates and favorable pricing might just make this the best decision you’ll make this year.