There is a typhoon of information focused on the housing sector and mortgage rate environment circling the airwaves these days. The press generally sells sensationalism through headlines and often misses the reality of what is really happening.

While no one has the luxury of accurately predicting future events (some do get lucky), it is important to look at the details in the story line and not get caught up in the drama.

Should you wait to buy a home – should you sit on the sidelines?

Real estate and investment professional are being asked this daily. The short answer is probably “no.”

Despite the rising interest rates news frenzy, now is an opportune time to purchase if you are looking for a property and plan to own it for the foreseeable future. These days, you are generally able to retain all contingencies and protections, while negotiating favorable terms with accommodating sellers.

Mortgage rates are the highest they have been in many years, but there will likely be refinance opportunities in the coming years. There’s a popular saying, “Date the rate. Marry the house.” You can always improve an interest rate when market conditions allow. You can almost never purchase a home in the future with today’s dollar.  

If/when the rates settle down, and the press dubs the market as “stabilized,” the bidding wars will likely return – and the frenzy will pick up where it left off.

Projections for Front Range home appreciation are to be somewhere between 3% and 5% over the next year. On a $500K purchase price, the cost to purchase goes up (conservatively) by $15K every year your you wait to buy. Plus, you’re likely squandering money in rental payments vs. paying down principal on an owned residence.

Supply and demand have always been the greatest indicator of trends in housing. Statistics (often skewed to prove a point) and projections show no housing bubble on the horizon. Colorado is still a highly desirable place to live, and folks are coming in droves. New construction hasn’t been able to keep pace with consumer demand. The millennial generation is reaching its peak for home purchasing in the next 2-5 years and accounts for roughly 1/3 of homebuyers. Most of these millennials are first time buyers without a property to sell, and that adds additional strain to the lack of supply.

We are in an economic transitionary period – there is no doubt. It’s part of the cycle that we have been through many times before. Dig a level deeper than the media reports, to understand the full picture of the numbers and their rippling effect.

There is always great opportunity for those able to navigate the chaos, and we are here to help. Please let us know how we can support you to make prudent decisions for your family’s financial security.

Planet Boulder Loan Consultants are available to speak about the market, interest rates, and Colorado real estate trends.