Over the last few years, we have seen the prices of homes skyrocket. Now, in addition to overpriced homes, interest rates are also extremely high. Because people are not willing to pay as much for houses when interest rates are higher, the market has started to slow down a little bit.
But when will prices start to go down?
Should You Buy Or Wait
The market here in Fort Worth looks similar to how it did at the end of 2020. The market is finally back to where it was before the pandemic.
If you don’t remember what the market looked like at the end of 2020, let me remind you. At the beginning of 2020, we were trending towards a balanced market. However, by the end of the year, we were in a hard seller’s market.
Even with the market reaching pre-pandemic normality, we are still in a market that heavily favors sellers.
This market favors sellers because we still don’t have enough homes available. We won’t have enough houses to meet the demand by the end of the year and in the best case scenario, we may have enough houses at the end of next year.
A lot of people are asking me if they should buy a house or wait to see if the prices will come back down. Honestly, it’s kind of a gamble right now but here is my thought process as someone who monitors the market very closely.
There is no guarantee that house prices will come down significantly. There has only been one time in history where house prices across the US have come down significantly and that was the crash of 2008. Even then, Fort Worth was not terribly affected. Prices across the DFW metroplex only fell by around 5%. (Source)
Because we are in a seller-friendly market and the number of people moving here is still very high, Fort Worth’s market could remain very competitive even if prices fall elsewhere.
Ultimately, there is no guarantee that the prices of houses will go down significantly any time soon.
Interest rates, on the other hand, may very well come down soon. Recently, interest rates have been hovering around 6-7% and they have been fluctuating rapidly. I find it more likely that interest rates will come down significantly before house prices do.
Historically, interest rates are much more prone to rising and falling than the prices of houses are. As I mentioned earlier, outside of 2008, the prices of houses have always risen.
I hear it said frequently that the best time to buy a house was 5 years ago and the second best time is now. This is often true because houses naturally appreciate over time, meaning that they naturally gain value every year.
Should You Buy Or Wait?
I would suggest that you continue to search for your next house and buy it as soon as you can. House prices rarely go down. In fact, they almost always continue to rise.
Interest rates are prone to change and you can always refinance your house when rates drop. It is better to buy a cheaper house with a higher interest rate than to buy a more expensive house with a lower interest rate because you can always change your interest rate when they come down.
My recommendation is to buy a house if you can find one. Things may still be a little hectic in the market right now, but prices are not likely to change drastically over the next few years.
If you would like to buy or sell a property, don’t hesitate to call the number on our website. We would love to help you with all your real estate needs.
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