Should you Buy Now or Wait until 2024?

A big question we get a lot is “Should I buy now or wait until next year?”. Given the state of the current housing market in combination with increasing inflation, it’s a very normal thing to ask. 

Since the start of the pandemic in 2020, interest rates and home prices have increased dramatically in just a matter of a few years. Home buyers who took advantage of such low interest rates then were in a great position to not only pay significantly less in interest over the length of their loan but they would get more money for their home when selling in the future.

Let’s do some math to compare 2020 to now. If you purchased a home back in 2020 with a sales price of $210,000 and an interest rate of 3% for a 30-year fixed loan, for a simpler example this does not include taxes, fees, and insurance, your monthly payment would be $885 per month. In comparison to today’s estimated rates, if you buy the same home for the same price with the same 30-year loan but it’s at a 6.5% interest rate, your monthly payment would jump to $1,327. That’s a difference of $442 or a 40% increase.

So, should you wait to buy? It depends. If you have the option to wait, it's okay to wait as it's forecasted that interest rates will decrease as inflation decreases and as the economy levels itself out according to Freddie Mac. If you buy now, there will be great options to refinance as interest rates decrease. Based on the CEO of the Mortgage Bankers Association, expected interest rates by the end of 2024 will be in the 4% range.

On the contrary, if you are a seller, home prices are up and according to the Des Moines Area Association of Realtors (DMAAR) and our recent July Market Update blog post, the average days on market were between 0-30 days 68% of the time in May 2023. It’s a good time to sell as you will get a fair price for your home and it has likely appreciated in value since you last purchased it.

If you are considering selling your home in the near future, give us a call! Considering the current market, we do have buyers that are looking for homes to purchase and yours may be the one they want to buy.