Yes, now is still a good time to buy a home

While it might seem counter-intuitive, there are advantages to buying a home when interest rates are high.

Pros of buying a home in a high-rate environment

Refinancing potential

Buying a home now doesn’t necessarily mean you can never access a lower rate. You may be able to secure a better mortgage interest rate by refinancing if rates decline in the future. In the meantime, the principal loan amount is decreasing with each payment. Depending on the timing of the refinance, the new mortgage may be for a smaller amount.

Ability to buy at list price

Despite high interest rates, the Oregon real estate market is still competitive due to robust demand. However, elevated rates may deter some potential buyers reducing the chances of a bidding war. This could mean shoppers are less likely to encounter situations where they need to submit offers above the asking price.

Opportunity to start building equity

Unlike other areas of the country dealing with sluggish home values and limited inventories, Oregon's housing market remains active with ample supply. If you're a homebuyer in Oregon, consider focusing on a home you can afford, despite rising rates. The sooner you buy a home, the sooner you start accumulating equity that can compound by further appreciation year-over-year. The longer you wait, the more potential home appreciation you miss out on.

What is the difference between home appreciation and home equity?

Home appreciation is the increase in a property's fair market value. Home equity is the portion of that home's value that the owner has paid off and truly owns outright.

Appreciation is about the rising value while equity is your financial ownership in that higher value.


Other considerations

In addition to understanding the pros and cons of buying a home right now, there are other things you can do to help decide whether such a move makes financial sense.

Evaluate your financial situation

Examine your job security and savings balance to ensure you can afford the expenses of owning a home. These costs go beyond basic mortgage payments and include property taxes and insurance. Building an emergency fund equal to at least three months of living expenses is often recommended. This money could be used to cover your mortgage payment, unexpected repairs, or other bills if you experience a loss of income.

Analyze the local housing market

When looking to buy a home, it is vital to assess the current state of the real estate market in your area. This might include analyzing recent data trends related to home prices, available inventory, and how quickly properties sell in a desired neighborhood.

An experienced real estate professional can help you complete this assessment. They can help you find motivated sellers, negotiate better terms, and explore creative financing options, such as seller concessions or buydowns, to make homeownership more attainable.

Buying a home in a high-rate environment can be difficult, but a thorough examination of your finances, the local housing market, and your long-term goals can help you decide whether now is the best time to make a move.

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