Date the Rate and Marry the House – Is it Still a Good Idea?
You’ve heard the old expression, “Date the Rate, but Marry the House.” The concept is that you can always refinance the loan, but the right house in Gulfport, MS or any other of our incredible coastal towns may not come around again. But with rising interest rates and falling home inventory, many buyers wonder if this mantra still rings true. Should you marry the house at whatever interest rate is available?
First, the US lending market had been experiencing record-low interest rates. In May 2000, we saw the 30-year fixed rate rise to an average of 8.6% before falling to 6.5% in July 2008. Historically, any long-term interest rate under 6.5% was exceptional. The rising and falling interest rates pattern has been repeated multiple times in the past 40 years and likely will continue.
Homebuying Strategy
Purchasing an unaffordable home and intending to refinance at a lower rate quickly has never been considered a smart strategy. You should be able to afford your monthly payment at the time of purchase, regardless of the interest rate. But waiting for a home that you like or need if you can manage the monthly investment amount isn’t a great idea either. It could mean missing out on a magnificent house that meets your needs. You can refinance and lower your already affordable payment when rates go down.
In conclusion, while the mantra of “Date the Rate but Marry the House” still holds true, buyers need to be more thoughtful in today’s real estate climate. Consider the costs involved and make a personal decision that aligns with your financial stability and long-term goals. Don’t wait indefinitely for the perfect interest rate, but also ensure that you can comfortably afford the house you choose. You can find a balance between your dream home and the changing interest rates by weighing your options.
Of course, you can always Come Home to Coastal MS™, where you can live your best life for less.™
Contact me for a list of affordable homes on the Mississippi Gulf Coast.
