Homebuyers Are Moving Forward Even as Mortgage Rates Remain Elevated

If you've been waiting for mortgage rates to fall before buying a home, you certainly aren't alone. But recent mortgage application data shows something interesting: many buyers aren't waiting anymore.

According to the Mortgage Bankers Association's Weekly Applications Survey, applications for mortgages to purchase a home increased 6% in one week, even as the average rate for a conforming 30-year fixed mortgage moved up to 6.69%.

So why are buyers moving forward when mortgage rates remain elevated?

One major reason may be something buyers haven't had enough of in recent years: more homes to choose from.

More Inventory Can Change the Buying Experience

For several years, buyers throughout South Jersey and the Philadelphia area faced an extremely competitive housing market. Limited inventory often meant multiple offers, bidding wars, waived contingencies and buyers feeling pressured to make decisions almost immediately.

As inventory improves in many markets, the equation begins to change.

More available homes can mean:

• More choices for buyers

• Less pressure to make an immediate decision

• Greater opportunity to negotiate with sellers

• Potential seller concessions toward closing costs

• A better chance of finding the right home without competing against a long list of other buyers

That's important because the interest rate is only one piece of a home purchase.

The price you pay, seller concessions you negotiate, loan program you choose and your ability to refinance later can all affect the long-term cost of owning the home.

Should You Wait for Mortgage Rates to Drop?

There's no universal answer.

Waiting for a lower mortgage rate can make sense in some situations. But there's another side to that strategy that buyers should consider.

If mortgage rates eventually decline substantially, more buyers who have been sitting on the sidelines could re-enter the housing market at the same time.

That could mean increased competition for desirable homes.

A buyer who purchases when competition is lower may have more negotiating leverage today and potentially have the opportunity to refinance later if rates improve. Of course, refinancing is never guaranteed, and buyers should make sure the payment they accept today works for their budget today.

That's why I don't recommend buying a home based on the assumption that rates will fall.

Instead, we can determine whether purchasing makes sense based on the numbers that exist right now.

The Mortgage Rate You See Online Isn't Necessarily Your Rate

Another mistake buyers make is assuming that a mortgage rate they see in a headline is the rate they'll receive.

Mortgage pricing can vary based on factors including:

• Credit score

• Down payment

• Loan amount

• Property type

• Occupancy

• Loan program

• Discount points

• Debt-to-income ratio

There are also multiple mortgage programs available, including conventional, FHA, VA and other financing options.

The right question isn't simply, "What are mortgage rates today?"

It's:

"What financing strategy makes the most sense for me?"

That's where getting properly pre-approved becomes important.

Buying a Home in South Jersey or the Philadelphia Area?

If you're considering purchasing a home in South Jersey, Philadelphia or the surrounding areas, getting pre-approved before you begin seriously shopping can give you a much clearer picture of your options.

We'll review your income, credit, assets, estimated payment and available mortgage programs so you know what price range makes sense before making an offer.

And if you've already been pre-approved somewhere else, I'm always happy to provide a second opinion.

Sometimes a different loan structure can make a meaningful difference in the monthly payment or cash required at closing.

Don't Try to Perfectly Time the Housing Market

Mortgage rates will move. Home prices will move. Inventory will move.

Nobody can consistently identify the perfect combination of all three.

What you can do is understand the numbers, evaluate the opportunities available in today's market and decide whether buying makes financial sense for you.

The recent increase in purchase mortgage applications suggests more buyers are reaching that same conclusion.

Thinking about buying a home? Let's run the numbers before you make any decisions.

Whether you're purchasing your first home, moving up, downsizing or simply wondering what you can comfortably afford, I can help you understand your options and build a mortgage strategy around your situation.

Mortgage MikeCrossCountry Mortgage

All loans are subject to underwriting approval. Rates, terms and programs are subject to change. Refinancing in the future is not guaranteed.