More than two-thirds of Americans believe that buying a home is an essential part of the American dream, according to a recent study from BMO Financial. However, despite continued belief in the benefits of property ownership, most would-be homeowners were hesitant to buy a home in the post-pandemic era. The same study found that a whopping 71% of would-be homeowners were waiting for mortgage rates to drop before they would make an offer to buy their own home.

Potential buyers had many good reasons not into the real estate market. While Mortgage interest rates Although mortgage rates have fallen in recent weeks, post-pandemic mortgage rates are the highest since the early 2000s. Home prices have also risen sharply due to limited supply, so potential buyers must expect high interest rates And Selection from a small number of high-priced houses.

The good news, however, is that Mortgage rates in September have already become more competitive, And The Mortgage rate forecast for fall 2024 suggests that a further reduction in borrowing costs could be imminent. The bad news is that borrowers Preparing for mortgage rate cuts and hope for Mortgage interest rates to fall below 6% are now faced with a difficult decision. They must decide whether to act quickly now that interest rates have started to fall or to continue to hesitate in the hope of further rate cuts in the coming months.

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Should you buy a home this fall or wait until interest rates drop further?

So is it worth buying a home this fall, or does it make more sense to wait for future interest rate cuts? Here’s what experts think.

Arguments for waiting for interest rates to fall

There are good arguments that buyers who have been undecided so far You may want to wait just a little longer. Because this autumn could be just the beginning of some positive trends.

“Mortgage rates will continue to fall in September and possibly the rest of the year,” said Neil Christiansen, branch manager and certified mortgage advisor at Churchill Mortgage. “That’s because the 10-year Treasury, currently at 3.8%, will fall to a range between 2.5% and 3.5% over the next few months due to falling inflation. If the 10-year Treasury falls into that range, rates should be between 5% and 6%.”

With the average mortgage interest rate currently at 6.41% on September 11, 2024, the prospect of a sharp decline in interest rates in the coming months could be reason enough to hold off on buying. But there could be another benefit: a potential increase in available properties.

“Higher interest rates have kept inventory low,” says agent Steven Gottlieb of Coldwell Banker Warburg. “If interest rates are lowered, the market should thaw.”

Current owners with affordable home loans were hesitant to offer properties because moving could mean trading a sub-4% mortgage rate for one in the 6% to 7% range. As rates fall and owners no longer face the prospect of their interest rate nearly doubling when they move, they will likely be more willing to offer their current homes, leading to this increase in inventory.

This does not mean Real estate prices will inevitably fall this autumnalthough this is possible in some markets. However, it does mean that you may have a larger pool of properties to choose from And the chance, get a lower mortgage interest rate if you wait a little longer before buying.

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Arguments for buying a house in autumn

While there are benefits to waiting, it’s also important to consider the reasons for making a purchase as soon as possible. In particular, there’s one important reason to buy sooner rather than later.

“The further interest rates fall, the more competition there will be among buyers,” says Sean Adu-Gyamfi, a real estate agent at Coldwell Banker Warburg. “Most buyers forget that in most cases they can refinance their home when interest rates are lower than current ones. My best advice is to buy a home as soon as possible to beat the rush.”

While Refinancing in the future Finding an affordable home is almost always possible, but may not be possible if demand – and prices – skyrocket due to falling interest rates.

“Basic economics says that prices will rise when demand increases – and they will when mortgage rates start to fall in the fall,” says broker Robert Elson of Coldwell Banker Warburg. “Any buyer who hesitates because they think rates will fall is embarking on a futile exercise.”

Missing the chance to buy a property before a possible price increase occurs could be a serious mistake, as you can change your home loan at any time, but not the price of the property. “One expression that has become very popular right now is ‘date the interest rate, marry the house,'” says Beverly Hankinson, senior vice president and manager of mortgage loan counseling at Frost Bank.

The conclusion

With solid arguments for the purchase And What should a potential homeowner do if he or she delays?

“Buyers should do what’s best for them based on their personal situation and have informed conversations with financial advisors,” Gottlieb says. “A ‘buy now, refinance later’ mindset may work well for some buyers, but not for others.”

The best course of action might be to look at a few homes, get pre-approved for a mortgage, and base your choice on whether you find a property you can afford now. And for which you actually want to make an offer.

As Hankinson notes, “If the house meets all your requirements, it probably makes sense to go ahead with the purchase with the option of remortgaging later.”