BIRMINGHAM, Ala. (WIAT) — Some people are on the fence about moving forward with home purchases due to high interest rates.
Birmingham realtor Gusty Gulas said interest rates are reaching up to anywhere between 7% and 7.5%, but they’re still seeing multiple offers on available homes.
Gulas said the number of offers they’re seeing is somewhat in connection with low inventory in the current market. Even with the circumstances, he said there is still value in this kind of investment.
Right now, Gulas said there’s a lot less competition amongst buyers because when interest rates do go down, buyers will be jumping off the fence making purchases left and right.
Some are considering rent as an alternative to buying, but Gulas said even rent prices are high.
“At the end of the day, real estate is probably the best wealth building choice that you can make. And so, you know, it depends on if you’re wanting to plant your roots here locally or just want to continue to buy and then buy another house in maybe two to three years. And so, it’s a great wealth building investment plan for your future.”
He said deciding whether or not to make a purchase largely depends on why you want to buy a house.
Gulas added that it is important to consider that buyers currently have more negotiation power with things like home prices, closing costs, and inspection costs. There is also an option to refinance down the road when interest rates go down.
He said there are some people truly in need of downsizing or expanding due to life changes like a lease ending or having children.
“And so those folks, regardless of the interest rates, they are moving forward. I think it’s the buyers that have just said, ‘Hey, we have lower interest rates and we’re going to move just because we want to move,’ we’re seeing less of them make that transition. So, I think it really just depends on what is that need for that homebuyer and then that’s when they’re making those changes.”
Gulas did say interest rates are projected to drop by about a one percent this time next year, but if you cannot wait there are options.
“There’s also things that we can negotiate to get an interest rate a little bit lower. So, we can do what’s called a two one rate buy down where you’ve got basically an introductory mortgage payment that’s less than what your initial 7.5% mortgage rate is right now,” said Gulas.