Century 21 Affiliated
Barry Shaw - CENTURY 21 Affiliated - Hudson WI

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If you’re thinking about buying a house, you might feel that mortgage rates are high and that it might make sense to wait until rates come down before buying.

According to this CNBC article, you’re not alone if you feel that way. A recent survey done by John Burns Research and Consulting found that 71% of prospective buyers aren’t willing to take on a 30-year mortgage unless it’s 5.5% or lower. This explains why there aren’t as many active buyers in the market as there were in the past few years, since rates are currently in the mid 6% range.

Interestingly, the consulting firm reported that their survey also revealed only 55% of prospective buyers feel like it’s not a good time to buy a home, and 22% feel it is a good time to buy. Simply put, there are a lot of prospective buyers who won’t buy a house right now, even though they actually feel like it’s a good time to do so.

To be fair, the potential buyers who feel that way have gotten used to mortgage rates that were considerably lower than they currently are for quite a few years. But they’re choosing 5.5% on emotion, rather than data. According to data from Freddie Mac, the average rate over the past 50 years was in the 7.75% range.



The first time 30-year mortgage rates had a number 5 as a first digit on a regular basis was in 2003. But even from then through late 2008, rates were as likely to be in the mid to high 6% range as they were in the mid 5% range. Mortgage rates only came down below 5.5% on a regular basis due to two major events: the 2008 financial crisis and the COVID-19 pandemic.

That was a fairly long span of years where people got used to the rates being lower, so it’s understandable why many potential homebuyers feel like a 5.5% rate is “historically normal” — even though it actually isn’t — but it was being done in order to stabilize the economy during extremely trying times. If you think about it, the good news is that we’re no longer dealing with such difficult times, and things are going back to normal. Well, at least in some ways…

The real estate market is still trying to figure out what “back to normal” is.

Why You Should Buy Before the Market Figures Out What “Normal” Is

By nature, the real estate market is rarely perfect for everyone. Sometimes it’s more balanced than others, but it’s usually more in favor of buyers versus sellers, or vice versa. Over the past few years it was most certainly a sellers’ market. Many people who listed their house in the past few years received multiple offers, and were able to sell their homes for over asking price in a matter of days. Great for them, but very difficult for buyers.

Buyers had to brace themselves for bad news every time they submitted an offer on a house. Even if they offered way above asking price and waived all contingencies, there was a good chance they wouldn’t be the winning bid. Plenty of buyers lost out on dozens of houses before they finally landed a house, and many others just gave up trying.

Back then, buyers couldn’t wait for the competition to die down…

Well, it has!

While higher interest rates aren’t something any buyer wants, they’re also exactly what many buyers need in order to have a fair shot at finding and buying a house they want. Lower rates don’t do you any good if you can’t actually buy a house. And if rates do come back down to where the majority of buyers polled say they want them to be, the competition will probably kick right back up. (Especially when you consider how many of the prospective buyers recently polled felt that now is a good time to buy, but want rates to hit 5.5% in order to do so.)

So, at least for right now, there’s a window of time where you have less competition to buy a house, and may not have to offer over asking or waive contingencies meant to protect you, like so many people had to do in the past few years.

And, who’s to say rates won’t only not go back down to 5.5%, but rather go up instead? Considering the rates have truly been closer to 7.75% historically — and for much longer periods of time — there’s as much chance of that happening as there is for rates to decrease. But if you buy now and rates do end up going back down, you can always refinance if they go down enough to make it worthwhile.

Many potential homebuyers feel like mortgage rates are too high and are waiting for them to come back down to what they feel is the “historically normal rate” of 5.5% before they buy a house. However, the historical average for mortgage rates is actually 7.75% over the last 50 years. So the current rates in the mid 6% range are still below the historical average.
Interestingly, even though 71% of buyers polled said they’d wait for rates to come down, only 55% said it was a bad time to buy, and 22% said they thought it was a good time to buy a house.
This makes now a good time to buy a home, because there are less buyers competing for homes than there has been for years, and if the rates do come back down, the competition will increase.


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What my clients are saying  

Barry is the best in the business! He exceeds expectations and truly cares about the people he is working with! Thanks Barry, we look forward to working with you again.

 

~ Kelli Joy

"Great experience would use Barry again. All worked out well. Excellent experience."

 

~ Collette

First time home buyer, and he was great to work with! I will definitely be using Barry in the future! Best guy in the business!

 

~ Jon K.

"Pleasure to work with. Answered all of our questions and always responded promptly. Made his schedule flexible to fit ours. Overall great experience."

 

~ Brad

"Barry helped my husband and I buy our first house. A lot of people advised me when I started talking about the home buying process that it was very stressful and time consuming. Yes, it felt a little stressful but I have to say buying our first house was a smooth transaction. Barry was excellent with communication. I prefer using my email since I don't always have my cell phone on me. Barry was very quick at replying to all my emails and was always very polite. Barry was also very professional when setting up showings for us, showing the house and at closing. When we received a counter offer on the house from the owner I wasn't sure how to go about it. Barry walked me through all possible options. The options he gave with his opinions felt trustworthy (he wasn't just trying to make the sell). I also really liked that Barry was laid back. He has a calm and friendly demeanor, made him a pleasure to work with!"

 

~ Katarina

I chose to work with Barry because he was recommended by a good friend. Barry was amazing. The process went smoothly because he constantly kept us up to date on EVERYTHING. I have already recommended Barry to a few people.

 

~ Liz

I was purchasing this home from out of state and Barry carefully chose a beautiful home for me and my price range.He carefully listened and answered all questions and was always available.I would highly recommend him!This was the perfect place to come home to.

 

~ Mike

This realtor is more on selling your home and investing his time and money into it. He works with you and is very respectable of your home. I have not found another realtor that cares about you selling your home instead of how much money they make. He is the best by far!! I have also heard from others how nice this person is and how helpful he is; who goes out of his way to please!

 

~ KT N

Barry was wonderful to work with, especially as I was a first-time home buyer and being completely novice with the home buying process. From working with me on affordable homes and proffering advice, and knowing when it was right to delegate concerns as appropriate, Barry definitely knew my needs and interests in a home. His approach is no-nonsense. Definitely not pushy. On the contrary -- On the day I saw the home of my dreams, there were still a couple homes on the list to check out and he had asked me if I was sure I didnt want to see them. I'd said no, but it was fantastic he encouraged me to try one or two other homes. But even my mum has an old adage - when the right house is found, one knows straightaway that is the one. And he was very helpful for a post-sale issue too. Am most grateful! And he's right - living in Wisconsin is fantastic. Barry is highly recommended - again, much thanks!

 

~ David

If you are looking for a new home Barry Shaw is your guy. He is excellent! He found us the home of our dreams and helped us with all of our questions through closing. Thank you Barry!!

 

~ Robb

Barry understands all the emotions you go through when buying/selling your home. He responded to emails quickly. He set up home showings quickly for my husband and I to view. His negotiation skills are excellent. I highly recommend Barry to sell your house or find the house you always wanted! He found the perfect house for my family.

 

~ Jennifer

It was very enjoyable to have Barry show us houses in Prescott,WI. and surrounding areas. He was responsive in showing us the homes we were interested in, with no pressure. He was very helpful.

 

~ MC

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