Facebook
X
Pinterest
Copy Link
Should You Wait for Mortgage Rates to Drop? The Simple Truth for Ocean County Buyers
Understanding the Impact of Mortgage Rates and Home Prices
When mortgage rates are elevated, many potential buyers consider waiting for a better rate before purchasing a home. While this seems like a logical approach, it’s important to compare the cost of waiting with the ongoing changes in home prices in Ocean County. Here’s a straightforward breakdown to help you make an informed decision.
Ocean County Home Prices Are Still Rising
Despite a cooling trend in the national market, Ocean County continues to see steady appreciation. Over the past year, local home prices have increased by approximately 3–5%, depending on the township. For example, a home priced at $530,000 today could rise to:
- $545,000 next year with 3% growth
- $556,000 next year with 5% growth
By waiting, buyers may end up paying more for the same home, even before considering mortgage rates.
The Impact of a 1% Mortgage Rate Drop
Let’s compare two scenarios:
- Current mortgage rate: about 6.23%
- Potential future rate: 5.23% (a full percentage point lower)
For a typical Ocean County home with a 20% down payment, a 1% lower rate could save a buyer:
- About $269 per month
- About $3,230 per year
These savings are significant, but it’s crucial to look at the bigger picture.
Home Appreciation vs. Rate Savings
Consider the same $530,000 home in Ocean County:
- With a modest 3% appreciation, the home’s value increases by $15,900 in one year.
This gain is nearly five times greater than the $3,230 saved from a 1% lower interest rate. In essence, if home prices rise even slightly, the increase in home value can outweigh the savings from waiting for a better rate. In fact, it would only take about 0.6% price growth in a year to match the cost savings of the lower rate—Ocean County has consistently exceeded this benchmark.
Key Takeaways for Buyers
- The market rewards action, not waiting. If prices rise while you wait for rates to drop, the higher home price often offsets any advantage from a slightly lower mortgage rate.
- You can refinance later. If rates do decrease in the future, refinancing allows you to potentially lower your monthly payment—without missing out on today’s home and price.
- Appreciation builds wealth immediately. Even with conservative 3% annual growth, your home starts building equity faster than the “extra cost” from a one-point higher rate.
A Simple Way to Approach Your Decision
If the home you want is both available and affordable today, buying now typically puts you ahead, as appreciation begins to work in your favor immediately. Remember, mortgage rates fluctuate, but home prices tend to rise over time. When you find the right house, it often makes sense to secure it now and consider refinancing later if market conditions improve.
A Coldwell Banker Riviera Realty agent can guide you through the current market, explain your financing options, and help you make the best decision for your long-term goals.
A Coldwell Banker Riviera Realty Agent can guide you through today’s market, explain your financing options, and help you make the smartest move for your long-term goals.”
