Boston condo for-sale agents are really selling the idea of buying a house/condo right now. They say all sorts of crazy things. One of my least favorites concerning interest rates is: “Date the rate but marry the house” The idea is that interest rates come and go and sometimes people can refinance.
I don’t think it is wise to take on a large mortgage and count on refinancing. For one thing, the interest on a mortgage is front-loaded which means the borrower pays the highest amount of interest in that first payment. The interest portion of the payment goes down slightly every month.
Each time the buyer of a Boston condo refinances the buyer starts all over again which is why it is best to wait until the interest rate drops a couple of percentage points before refinancing.
Real estate agents are reminding us that mortgage interest rates have been higher. That is true but home prices are also higher as they have risen much faster than wages during the last 50 years or so.
There really isn’t an upside to the Boston condo for-sale market right now at least not for buyers.
Some Boston condo agents are suggesting that now is a great time to buy because there is less competition. There is less competition but there is still enough competition to create multiple offer situations in some cases.
Housing prices are at an all-time high right now and interest rates are at a 20-year high. There are people who have been priced out of the market. It is simple math. There isn’t any other way to look at it.
There are still some great reasons to buy. Some home buyers will pay less for housing if they buy rather than rent. Maybe not in the first year but in the long run. People who own houses are building equity.