Why Homebuyers Shouldn't Give Up the Search

With the rise of mortgage rates, many hopeful buyers are pulling back on their house-hunting efforts. Here’s why homebuyers shouldn’t give up the search for their next home just yet. 

Divorce the Rent. Date the Rate. Marry the Home. Have you heard this saying before? It’s an easy analogy that many professionals use to put things in perspective for hopeful buyers. 

Divorce the Rent

The jump from renting to owning can be overwhelming, but it’s worth the leap. “Real Estate has shown itself to be one of the best investments in recent history and is, on average, the largest store of wealth for an individual or family.”

If your goal is to build generational wealth for your family, renting isn’t working towards that goal. Consider the cost of your monthly rent and how much your monthly payments would change with a home. This article outlines the tough choice many homebuyers are facing, “Rents are going up, and your landlord is drooling over inflation numbers. Lock in your housing payment and let your landlord raise rents on a different tenant.” Even with rising inflation, many renters might hold off on purchasing due to the rising mortgage rates. 

So is it worth it to stop renting and start appreciating the value of your home? We think so. Price appreciation will likely move to a more normal growth rate of around 5-6% in the coming years, which makes for a much healthier market than what occurred in 2020 and 2021. 

Date the Rate

For many hopeful homebuyers, the purchasing power they had earlier in the year decreased with the rise of mortgage rates. 

This is when the term “date the rate” comes into play. While we don’t know when these rates will drop, history tells us they most likely will. When that happens, you’ll have the option to refinance to lower your monthly payments. 

For buyers with a stable income that can afford it, this could be a good purchase opportunity with less competition from other buyers and decreasing sale prices. 

So when the market rights itself again, you may be in a better position for a huge payoff. 

Marry the Home

Buying a home is a lot like a marriage. You date around and tour different houses until one day you stumble upon your dream home. It might have some flaws or some things you need to change, but you love it anyway because you see the potential. 

Or you could look at it another way, you can’t change the lot size, the location, or the schools, but you can change the house. So whether you buy your dream home finished or you find an opportunity in your dream location, remember you marry the home! 

On average, most Americans stay in their homes for over 10 years. Remember that when you're considering a purchase! 

How Province RE Can Help With Your Home Search

As a specialized team, we have a few tricks up our sleeves to help homebuyers increase their purchasing power.

Even though the Bay Area is still an expensive place to live, home prices continue to drop. Zillow recently reported that home prices decreased by 7.1% in Palo Alto and over 6% in Santa Clara County. Remember that lower home prices also mean lower loan amounts. 

1. Our team of agents is well-connected. Province RE can connect you with several mortgage loan officers with competitive rates. We even have a mortgage specialist and financial advisor on our team who can speak to you anytime about your options. 
   
   
2. The current months of supply inventory indicate that the Bay Area housing market is moving toward a more balanced market for buyers. This shift gives us more leverage during negotiations. Whether it’s coming in at a lower price or negotiating credits to buy down the points, there are a few ways we can help lower the sale price. 
   
   
3. With our partnership with Thomas James Homes luxury builder and other developers, we have exclusive access to off-market properties. Ask us about off-market opportunities in your home search. 

The Province Real Estate team is committed to our client’s best financial interests. Our team is not commission driven. We will always do what is best for our clients. Give us a call when you are ready and we will put together a personalized strategy that will best suit your family's financial and housing needs.