"Should I get a mortgage now or wait?" With current rates just under 7% for a 30-year fixed mortgage, it's a valid concern. However, let's dive into the details to understand the market and why acting now could be a wise decision, even with rates predicted to decrease in September 2024.

Historical Context of Mortgage Rates

Understanding the history of mortgage rates can provide valuable perspective. Here’s a brief overview:

-1980s: Mortgage rates peaked at around 18% due to high inflation.

-1990s: Rates stabilized, averaging between 7-9%.

-2000s: Early 2000s saw rates drop to 5-6%.

-2010s: Post-recession, rates hit historic lows, often between 3-5%.

-2020s: Rates dipped below 3% during the pandemic but have since risen to around 7%.

This historical perspective shows that mortgage rates fluctuate based on various economic factors. The current rate of just under 7% is not unprecedented, and in many ways, it's part of the natural ebb and flow of the market.

The Current Market Dynamics

Today’s mortgage rates are influenced by several key factors:

1. Economic Recovery and Inflation: As we recover from the pandemic, inflationary pressures have led central banks to adjust interest rates upward.

2. Housing Demand and Supply: A surge in demand coupled with limited housing supply impacts mortgage rates.

3. Global Market Trends: Geopolitical events and global economic conditions also affect rate fluctuations.

The Long-Term Value of Real Estate

Despite the current rates, real estate remains a strong investment. Historically, property values appreciate over time, providing significant long-term benefits:

- Equity Building: As you pay down your mortgage, you build equity in your home, which can be a valuable financial resource.

- Appreciation: Real estate tends to appreciate over time, often outpacing the initial costs of higher mortgage rates.

- Inflation Hedge: Property ownership acts as a hedge against inflation, with home values increasing as the cost of living rises.

Why Buying Now Makes Sense

Here’s why acting now, rather than waiting for rates to drop, could be beneficial:

1. Home Prices on the Rise: With demand outstripping supply, home prices are expected to continue their upward trajectory. Locking in a home now means you avoid higher prices in the future.

2. Rate Prediction for September 2024: While it’s true that rates are predicted to decrease in September 2024, the exact timing and extent of the decrease are uncertain. Current rates, though higher than in recent years, are still historically reasonable.

3. Financial Stability: Owning a home provides financial stability and security. Fixed mortgage payments offer protection against rising rental costs and contribute to building personal wealth.

Strategic Planning for the Future

For those concerned about the current rates, consider this strategic approach:

- Refinancing Opportunities: Should rates decrease as predicted in September 2024, and continue to refinancing your mortgage can be a viable option. This allows you to benefit from lower rates while already having secured your home at today's prices.

- Locking in Now, Benefiting Later: By purchasing now, you can take advantage of the anticipated appreciation in home values and potentially refinance to a lower rate later.

Make an Informed Decision

As The Mortgage Planner, my advice is to carefully consider the long-term benefits and management against the backdrop of current market conditions. While waiting for potentially lower rates as they kick the can in 2024 might seem tempting, the ongoing rise in home prices and the inherent value of securing a home now make a compelling case for acting sooner rather than later.

By purchasing a home today, you position yourself to benefit from future appreciation, build equity, and secure a stable financial future. Don’t let the current rate environment deter you from achieving your homeownership and networth. #gethePLAN