Reasons You Shouldn’t Wait for Mortgage Rates to Go Down to Buy a Home

Our experts answer readers’ investing questions and write unbiased product reviews (here’s how we assess investing products). Paid non-client promotion: In some cases, we receive a commission from our partners. Our opinions are always our own.Mortgage interest rates are currently hovering at or near 6%, and home prices have increased even though inventory has not. Despite this, many prospective homebuyers are ready to act.According to data from the Bank of America Homebuyer Insights Report, 62% are willing to wait for prices and/or rates to fall before buying a home, down from 85% just seven months ago.According to Matt Vernon, head of consumer lending states at Bank of America, it’s not worth waiting for rates to drop if you’re otherwise ready to buy.”The best time to buy a home is when you are ready financially and you find a home that fits your needs,” he told Personal Finance Insider.Here are three reasons why homeownership is still a priority for many, and why you could be better off acting sooner rather than later.For many people, buying a home will be the biggest financial decision they make. Buying a home is also typically the first and most consistent way that many start building wealth.As soon as you buy a home, you can start building equity, which can be used for financial needs such as retirement down the road.Many prospective homebuyers are forging ahead with plans to buy homes even if the market conditions aren’t ideal.”Trying to time the market is rarely advantageous, and the best indicator of the right time to buy a home is your budget,” says Vernon.According to the Bank of America survey, 91% of prospective homebuyers view a home as a valuable investment rather than a financial liability, and 89% think owning a home provides more financial security than risk. So while buying a home may still be expensive, the advantages aren’t lost on potential homebuyers.Prospective homebuyers surveyed also said they’d be willing to put up to 25% of their monthly income toward mortgage payments for a starter home and 30% for a forever home, compared to just 29% toward monthly rent.”There’s no denying the challenges of today’s home-buying market. But buying a home is still a priority for many and as we move further into the year and the market continues to change, there will be more opportunities to make homeownership a reality,” Vernon told Personal Finance Insider.To prepare themselves to purchase a home, many potential buyers are finding new ways to save or make more money to put toward the down payment and ongoing mortgage costs.Whether turning a passion into a side hustle or taking on freelance work, the Homebuyer Insight Report found that the majority of homebuyers (56%) are willing to consider a second job to earn supplemental income for a home purchase. For instance, approximately one-third of prospective homebuyers would consider starting an online store to sell handcrafted pieces (34%) or selling some of their belongings (31%) to save for a home.”Whether your next step is to build your savings or apply for a mortgage pre-approval, the more informed you are about the market and purchasing process, the more able you’ll be to put your best foot forward when pursuing a home,” says Vernon.

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