Opinion - Shaun Kent, Mortgage Loan Originator, NMLS 255566
"Should I buy now or should I wait?"
Like a tennis ball lofted to my side of the desk, this common question typically sets the table for a detailed back and forth conversation around interest rate projections, current Fed positioning and general market conditions. I have been asked this question so many times over my near twenty-year lending career, that no matter the details - I finish my explanation with the same encouragement: "There are good purchases in any market, but only for those who are ready."
These days, many seem to think that by waiting, they might take advantage of home prices falling off a cliff. The sting of rapid and sudden equity loss in 2008 is recent enough that it lays a heavy fog over weary buyers. I was right here in 2008, having been a mortgage lender for 5 years, 3 of them in Central Oregon. I remember hearing that 1 in 4 homes was in some state of distress: short-sale, bank owned, or foreclosure. I never looked to see if that was true - but it sure felt like it. Everybody knew somebody who was losing their home. The massive foreclosure event put thousands of homes on the market all at the same time. Wave after wave of foreclosures occurred over multiple months. Prices dropped because banks had to clear their books.
In 2019, conditions were primed for our next big foreclosure event - the Pandemic. Entire industries were deemed unessential and millions were out of work. Historically this is the fodder for deep corrections in the housing market. But homeowners were thrown a lifeline. The government decided that the losses sustained in the last recession were too significant to repeat. Mortgage forbearance programs came to bear. Renters could skip paying rent, owners could stop paying the bank, and everyone was able to hunker down and weather the storm. Values skyrocketed as the home became the schoolroom and the office.
We won't crash. Mortgage forbearance programs worked as far as the government is concerned. The current administration will not allow a major foreclosure event, and without it - we will not have the distressed sales required for an equity meltdown. As rates go up, the owners who don't need to sell (which is most everyone) will choose not to.
"Why sell and give up our 3% mortgage, honey? Let's just take out an equity line and remodel the kitchen."
In conclusion, there are good purchases in any market, but only for those who are ready. Find a great realtor and contact my team today to get preapproved, educated and prepared to buy - it is always our honor to serve.