Hi, I’m Brad Brethouwer, team leader for the Brad Bret Group at eXp Realty. In today’s video I talk about the mortgage rates and how it pertains to purchasing now versus waiting for rates to come down. 

I hear comments from people all the time saying, “I’m just going to wait for the rates to come down,” “I’m just going to wait for housing prices to come down.” I hate to be the bearer of bad news, but the only thing that’s coming down is the mortgage rates, not the housing prices. 

We are in a market with low inventory and the demand is very high. There’s nothing on the horizon for several years that would justify seeing the values of homes go down. The rates will come down, that’s going to happen. Mortgage rates have a history of going down in the years of a presidential election which is coming up next year. 

Today, if you were to buy a $400,000 home with a 6.75% interest rate your monthly payment with principal and interest, not including taxes or insurance, would be about $2,076. So if you got in now and refinanced later when it goes down a whole point to 5.75%, you're going to drop to $1,867 a month. 

If you were to wait a year for the rates to come down to 5.75% before you buy, everybody else is going to jump back into the market at the same time. The whole point of the Fed raising the rates was to slow down the demand, so as soon as rates go back down a lot more people will be back in the market. 

If you pay a normal appreciation rate on that same $400,000 house, it will be about $420,000. The monthly payment on a $420,000 house at 5.75% would be $1,961. So you’re going to be at a higher monthly payment than you would be if you were to buy now and refinance later. 

If you have any questions feel free to reach out to us, we can walk you through the process and show you how we operate. You can find us online at www.bradbret.com, call us at 608-234-5033, or email us at brad@bradbret.com.

Have a great day!