Mortgage rates have surpassed 7%, reaching their highest levels since May. Despite this increase, consumers appear to be acclimating to the elevated rates. Darren Copeland, founder of Summit Lending, notes that many prospective homebuyers are proceeding with purchases, anticipating future opportunities to refinance when rates decline. He emphasizes the importance of educating clients about potential refinancing options down the line.
The National Association of Realtors reports that existing-home sales have declined to their lowest point since August 2010, with a seasonally adjusted annual rate of 3.78 million units. However, Chief Economist Lawrence Yun suggests that the market may soon rebound, especially with an expected increase in housing supply.
Copeland advises against waiting for rates to drop, as a decrease could lead to heightened competition and overbidding. He points out that purchasing now at a 7% rate, with the possibility of refinancing later, might be more advantageous than delaying and facing inflated home prices due to increased demand.
First-time buyers are encountering significant affordability challenges. Copeland observes that in regions like the Kansas/Missouri border, the cost difference between mortgage payments and rent has narrowed, making homeownership a more attractive option. He also notes a generational shift, with younger buyers often seeking homes comparable to their parents' current residences, rather than starting with more modest properties.