Should You Wait for Mortgage Rates to Drop Before You Move?

We will explore options if you are waiting for Mortgage Rates to Drop in Metro Detroit before you Move. It may not be in your best interest to wait. 

Should You Wait for Mortgage Rates to Drop in Metro Detroit | Team Tag It Sold

Are You Waiting for Mortgage Rates to Drop?

The housing market has a clear pattern in Metro Detroit: higher mortgage rates usually mean fewer people are looking to buy homes. Higher rates mean higher monthly payments, which can make people hesitant. They might decide to wait to move (BP~ Sellers Market is good for the bottom line) until it’s time to borrow money for their new home.

When mortgage rates drop, we see the opposite happen. More people start looking to buy in Metro Detroit because the loans are more affordable. This makes the market busier, with more buyers ready to purchase homes. Below is a graph that shows how this trend works and what’s happening right now: 

As Lisa Sturtevant, Chief Economist for Bright MLSexplains:

“The higher rates we’re seeing now [are likely] going to lead more prospective buyers to sit out the market and wait for mortgage rates to drop.”

Why You Might Not Want to Wait

If you are on the fence in Metro Detroit, this is a vital point you may want to consider when buying a home due to current mortgage rates. Remember the “Unicorn Years” not too long ago? During that period, the market saw an exceptionally low housing supply coupled with a surge in buyers, which drove home prices sky-high due to fierce competition and multiple offers on available homes. It’s a classic example of pent-up buyer demand causing significant market fluctuations.

You might want to reconsider if you’re waiting for mortgage rates to drop. While lower rates are attractive, they often coincide with higher home prices. When everyone has access to lower mortgage rates, buying power increases, and so does competition for homes. This can lead to a repeat of the bidding wars experienced during the Unicorn Years, pushing home prices up again in Metro Detroit.

Buying a Home When Home Prices Are Stable 

On the other hand, buying when home prices stabilize—even if mortgage rates are a bit higher—might be a wiser decision. Here’s why: while you can refinance a mortgage to take advantage of lower rates later, the initial price you pay for your home is locked in. This approach can ultimately prove more cost-effective. Understanding your purchasing power now, rather than waiting for an uncertain future, can help you make a smarter, more informed decision that aligns with your long-term financial health. It’s not just about timing the market; it’s about understanding your position.

 Recommendations to Consider

  1. Tracking Mortgage rates daily
  2. Understand how Mortgage-backed Securities affect the Mortgage Rate
  3. Learn how to Predict and Time the Market: Mortgage Rates Empower Your Move
  4. Start working the Numbers: Know Your Home Purchasing Power
  5. Track home prices by Sold Properties by City
  6. Track Home Price Trends, Inventory Levels, and Days on Market
  7. Get Access to the Multiple Listing Service and set up an account to track new and Coming Soon Listings that meet your essential criteria. 

Final Thoughts

Suppose you’re trying to decide whether to wait to move in Metro Detroit while you’re waiting for mortgage rates to drop. Remember that when rates do drop, more buyers will likely compete for homes, making it harder to get a good deal. So, if you’re ready to move, it might be worth considering doing it sooner rather than later. If you want to crunch numbers and discuss your options, call me at 248-343-2459. 

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