Why now is the time to buy a house: William Raveis VP

Mortgage rates are showing signs of easing, falling below the 7% for the first time in a month. Melissa Cohn, William Raveis Mortgage regional vice president, joins Wealth! to discuss her outlook on the housing market.

Cohn notes that "more buyers will come into the marketplace" as rates continue their downward trajectory. She advises individuals looking to purchase a home to buy now. As the number of homebuyers increases and rates continue to drop, Cohn says, "prices are likely to go up."

Cohn also highlights home sellers, noting the importance of finding "that happy medium." For those looking to sell their properties, she says they must remember that they will ultimately be in the market to buy as well.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video transcript

Let's get back to those mortgage rates.

They did dip below 7% for the first time in over a month.

So, is it time for buyers who are on the sidelines to jump back in the game?

Joining us?

Now we've got Melissa Cohn, the regional Vice President of William Ravis mortgage joining us here.

Great to have you here with us, Melissa.

So people naturally here, oh, wait, we're back below 7%.

Is this the time to strike?

Well, the answer to that in my eyes is yes because when as rates continue to drop as we hope they will through the year, more buyers are gonna come back into the marketplace.

So if you wanna be able to take advantage of where price points are today, then now is the time to buy and take advantage of these rates.

When rates are lower, more buyers will come back into the marketplace because of the increased affordability and prices are likely to go up, not to disagree with you at all, but to merely ask the question.

Does it matter if people are gonna just look to refinance later on down the line?

Anyway, if you think about it.

It's really a question of doing the math.

You know, if you have to pay three or $400 a month more on a mortgage today, but you would have to pay $10,000 or $20,000 more for that house in a year.

$400 a month is $5000 a year.

It's probably cheaper to buy now and then refinance next year.

Certainly.

Ok.

So where could some of the hotspots really emerge based on where we've seen some of the buying activity or bidding activity still remain strong.

Um You know, I've seen a lot of uh sort of in the over a million dollar price point, there seems to be a lot of activity there, you know, higher price point.

Uh borrow buyers that have greater income willing to step in and pay the higher mortgage rates today to take advantage of what they feel or lower real estate prices, you know, in today's market.

Um You know, there are also a lot of people that are just moving, people are relocating for work.

People who with life cycles are having kids, they can no longer stay in their smaller home and need to move and those people are moving.

We saw in the data from Freddie Mac that although this week's data on previously owned home sales, so existing home sales showed a decline, total inventory of both new and existing homes is up and focusing in on that new homes elements too as that's taking on even more of a percentage than that than we've seen in historical standards and averages of the overall home buying market.

How does that alleviate now some of the pressure on pricing?

Well, what a lot of these new homebuilders are doing is that they are offering incentives with regards to the financing, they're offering to pay points to buy down their rates, offering a lower initial rate, making it more affordable for someone to buy into these new homes.

If you're buying an existing home, a seller doesn't have the same ability necessarily to give you a lower rate for your mortgage with that in mind.

And we're taking a look at some of where home sales fell in April on, on screen according to the Nar and Census Bureau data.

One of the other areas that a lot of homeowners are trying to figure out is when does it feel like the right time to list?

Especially as they're tracking mortgage rates as well?

Well, you know, that's a really good question.

You know, if you are going to be able to, you know, do you need to sell now or can you wait, you know, if you think that rates will really come down strongly over the course of the next year as we all hope they will and prices will go up if you can wait, do you want to wait to list?

You know, if you're going to be moving and you have a low interest rate, you know, you have to find the home at the right price.

So if you're going to want to buy lower today, you're going to have to sell today.

Um And it's really just a question of where you're gonna find that happy medium for you as a seller because as a seller, you're probably gonna be a buyer as well.

And just lastly, renting versus buying right now with mortgage rates.

Sure, coming down below 7% but still sitting right now at a 30 year 694, does that kind of play into for renters out there?

Does that to you signal that we could see people come off the sideline in droves who are currently renting?

I mean, the answer to that should be yes.

And if you buy now today and you expect that mortgage rates, let's say over the course of the next two years could be as much as 2% lower than they are today.

Then the cost of that home ownership will only decline over the course of the next few years.

And you'll have the ability to refinance and to lock into a much lower rate.

You know, rental.

When you rent, you have no equity, you're all you're doing is you're basically, you know, you're giving your money to your landlord and you're not building any equity or investment for yourself.

Yeah.

Well, thanks for reminding me, Melissa Cohen, who is the regional Vice president of William Ravis Mortgage.

Thanks so much.