The Colorado real estate market has finally started shifting, slowly evening out and getting closer to a balanced position. This current shift is mostly due to increased interest rates from the Federal Reserve to offset rising inflation. So people are asking, 

"Should I wait until the interest rates decrease before I buy or sell?"

The short answer is NO. But like all things, it depends on your current needs and financial goals.

For sellers, it means that your home may sit for a while longer than it did earlier this year. You may not get the insane offers buyers were putting in this past spring, but the inventory is still historically low so there is still competition to buy. If you price it right it should sell in about 2 months, and if you’ve had your home for even 1-2 years, you’ve made some awesome equity from it and there’s no reason to wait to sell if you are ready to move on. Interest rates are predicted to keep climbing until end of the year, so the buyer pool is going to continue to shrink potentially meaning more days on the market for you by end of year. 

For buyers, yes, interest rates have risen since March, and are teetering around 7%. For those of you saying, ‘That’s crazy! I’m not buying a house at 7% interest! I’ll just wait until the rates drop again.” Here's what increased interest rates really mean for you.

Higher rates = less buyers = less competition to buy homes.

Home prices will be less than the high prices this spring, offsetting the interest rate increase in most scenarios.

We haven't surpassed 6% on home interest since 2008, but this is STILL lower than our historic average of 8% which forecasters predict we might reach by the end of the year, so it's cheaper to buy now vs later. 

If you purchase now and the interest rates DO go down, you can always refinance to take advantage of better rates.

If you are planning on owning long term, any money you put towards owning a home is going to give you greater benefits in the long run over renting.

Monthly rental costs are JUST as expensive as a mortgage, and in some areas, more expensive.

"Let's say I want to wait it out anyway. That's a better strategy, right?" We don't have a crystal ball to answer that specifically, but we did ask our preferred lender, RJ Baxter, to do a scenario on the potential of home costs or savings based on what the industry is expecting for the next 3 years, and he provided these slides to give you some insight on what we are anticipating will happen. 

If you have questions on any information you see below., please reach out to RJ's team at 303.670.0137. They would love to make sure you have all the information you need to make an informed choice on the financial impacts of buying a home.

We are happy to help answer questions as well, please contact us at 720.799.0007 if we can help in any way.