Here’s why we might just be in a buyer’s market and a seller’s market.
Are we in a buyer’s market or seller’s market? This is a question that I hear a lot, and my answer right now is that we might be in both. The easy answer is to say, “Yes, we’re in a seller’s market because of low inventory.” However, things aren’t all bad for buyers.
Let’s quickly take a look at interest rates from a historical perspective. Way back in the 1980s, mortgage interest rates were between 15% and 17%. Could you imagine that? Fast forward to just a few short years ago when rates were around 5%. On a $250,000 home purchase with a 5% interest rate, you’d be looking at about $221,000 in interest. That’s a considerable amount.
Interest rates are as low as they have ever been.
Now let’s see what your interest is like with today’s rates at 2.875%. That same purchase price of $250,000 would have interest payments of just $117,000. That’s a considerable six-figure savings in just a few short years.
With today’s low inventory and low interest rate market, buyers may be overpaying a bit for homes. In the long run, however, they're saving tens of thousands on their purchase. That’s why I believe that this is both a buyer’s and a seller’s market.
If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
