Interest Rates and the Real Estate Market: Should You Wait for Rates to drop? Buy Now and Refinance Later?

The real estate market is constantly shifting, and one of the biggest factors affecting homebuyers and homeowners is interest rates. With rates fluctuating, many buyers find themselves wondering: Should I buy now, or should I wait? And if I do buy, should I refinance later? Let’s break it down.

Understanding Interest Rates

Interest rates play a crucial role in affordability. When rates are low, borrowing money is cheaper, meaning lower monthly mortgage payments. When rates rise, borrowing becomes more expensive, potentially making homeownership less affordable for some buyers.

Over the past few years, we’ve seen significant fluctuations in mortgage rates. While they may not be at historic lows, rates today are still considered reasonable compared to long-term trends. Trying to time the market perfectly is difficult, and waiting for rates to drop could mean missing out on a home that fits your needs.

Should You Wait to Buy a Home?

The decision to buy a home should depend on more than just interest rates. Here are a few factors to consider:

• Market Inventory & Prices: If demand remains high and inventory is low, home prices could continue to rise, potentially offsetting any benefit from waiting for lower rates.
• Your Personal Circumstances: Are you ready for homeownership? Do you have job stability and financial security? If the answer is yes, it may be better to buy now rather than wait for uncertain rate changes.
• Potential Rate Drops: While rates may decrease in the future, there’s no guarantee. Many experts predict that rates will remain steady or decline slowly rather than return to historic lows quickly.

⭐️Buy Now, Refinance Later Strategy⭐️ – my recommendation

If you’re concerned about higher interest rates but need to buy a home now, refinancing later could be a smart option. Here’s how it works:

• Secure the Best Rate Available Now: Lock in a competitive rate and focus on getting a loan with favorable terms.
• Monitor Interest Rate Trends: If rates drop in the future, refinancing could help you secure a lower monthly payment.
• Consider Adjustable-Rate Mortgages (ARMs): If you plan to refinance, an ARM might offer a lower initial rate, giving you flexibility to refinance when rates improve.
• Ask local lenders about Complementary Rate Rebound Refinance Programs. Here is more information: Click Here

Check out this short video about the Rate Rebound Program: Video Link Here

The Bottom Line – Home Prices Increasing Year Over Year

Over the past five years, New Hampshire’s housing market has experienced significant growth:​nhhfa.org

• Median Home Price Increase: The median price for a single-family home rose from $283,000 in 2018 to $470,000 in 2023, marking a 66% increase over five years. ​nhfpi.org+1nhbr.com+1

• National Ranking: New Hampshire had the second-highest spike in median home prices in the nation, with a 76.4% increase over the last five years, according to research by Pro Tool Reviews. ​rocherealty.com+1nypost.com+1

These figures highlight the robust appreciation in home values within the state during this period.​

Rather than trying to time the market, consider your long-term goals. Buying now allows you to build equity and avoid rising home prices. If interest rates drop in the future, refinancing can provide an opportunity to lower your payments. Every market cycle presents opportunities, and the key is to make informed decisions based on your personal and financial situation.

If you’re thinking about buying and want to explore your mortgage options, reach out to a trusted lender or real estate professional who can guide you through the process!