Three years ago – in what some people now think of as The Good Old Days – mortgage rates were at historic lows.
But there were obstacles. Super-low rates contributed to rapidly rising prices and white-hot competition for homes in Metro Boston. Many buyers became despondent after being outbid again and again by multiple other buyers.
With so many potential buyers, sellers started to expect buyers to waive important contingencies and get into bidding wars without knowing about possible serious problems with a house.
It always seems like it’s more difficult to be buying a house “Now.” But there were usually other issues that made it seem like a tough time to be buying a house “Then” too.
If you’re hoping to buy a home in the near future, it may take time. It may take luck. It will definitely pay to remember that every generation has seen that there are usually obstacles to overcome – especially when buying a first home.
Some good news: While the past is not a guarantee for the future, the Metro Boston real estate market has been strong for decades. Buying a home around here has proven to be a good investment for millions of local people – well worth the time and effort to get past the obstacles.
One of the biggest obstacles can be summed up in the word “Circumstances.” Many people have a problem from their past they’re concerned will keep them from qualifying for a mortgage.
That’s also one of the easiest obstacles to deal with. Lenders hear about “Circumstances” every day of the week. No matter what yours might be, chances are a lender has heard it (or something close to it) many times before.
If you’re concerned, the best thing to do is to sit down with a local lender to talk about your situation.
Often people are pleasantly surprised to hear that what they thought was a big problem just isn’t. If there is something you need to deal with to be able to qualify for a mortgage, a good local lender can help you come up with a solid plan.
Rising rates are also an obstacle. The reality is that – according to the Federal Reserve – 7.74% is actually the average mortgage interest rate over the past 50 years. Rates have been lower, yes. They have also been much higher.
Mortgage rates are very dynamic. If rates continue to rise, people who buy today will be glad they did. If rates go down, most homeowners take the opportunity to refinance. If rates stay about the same as they are now, that will be average.
More good news: If other people are making it happen, there is the chance that you can too. If you have a predictable income and you’re flexible in your expectations, today’s rates do not have to keep you from buying a home.
A third obstacle? A lot of people dream of buying a house but they haven’t done the homework to get ready for the big next steps. They haven’t run the numbers or gotten pre-qualified for a mortgage. Some aren’t sure how much ownership of the home they want will actually cost.
Being prepared is 100% under a buyer’s control. Find a local lender and a real estate professional – people who you can talk to and work with and trust. Do what you can now to be ready if the opportunity you have been hoping for presents itself. Because it often does.
From the “Smart About Money” Canton Citizen column published on December 28, 2023.
Nick Maffeo is the President & CEO of Canton Co-operative Bank – right next to the Post Office – in Canton.
Have a question? Email to info@cantoncoopbank.com.