What buyers in Northwest Ohio need to know about higher interest rates.
I’m here to assist you in expanding your knowledge of real estate in Northwest Ohio. Today’s focus for my latest real estate update pertains to the current state of high interest rates in 2023 from a buyer’s perspective.
Firstly, the prevailing rates might seem excessively high, and historically, whenever the cost of borrowing rises—which is the case now—assets like real estate tend to decrease in value. However, this isn’t the scenario we’re observing presently. So, if you’re looking to purchase property in Northwest Ohio, the interest rates can appear daunting. Here are a few strategies you can consider:
1. Accept the situation and budget for the higher interest rates. Recognize that this comes with the cost of interest. At the moment, rates are at a 20-year peak. The Fed recently raised the basis points, indicating ongoing rate increases.
2. Opt for a more affordable property. Consider a house in a different price range—smaller, less expensive, but still functional. By doing so, you can maintain your current payment amount by moving to a more affordable market segment.
“Despite higher rates, home prices remain steady.”
3. Explore alternative sources of funding beyond conventional mortgage interest. This could include assistance from parents, grandparents, savings, or other financial sources. While I don’t recommend tapping into retirement funds due to tax implications, various borrowing options are available.
4. Float the loan by borrowing at the current higher rate. Later, you can refinance when rates potentially decrease in the near future.
5. Consider renting. Temporarily save funds and invest them elsewhere, such as in stocks like Tesla or Apple. This strategy allows you to make returns on your money while keeping an eye on interest rate adjustments.
6. Relocate. If buying seems unfeasible, you might think about relocating to a more affordable area or exploring owner-financing opportunities. However, finding legitimate owner-financing deals can be challenging, particularly in our relatively low-cost Northwest Ohio market.
Here’s the bottom line: If you want to purchase a home in Northwest Ohio, I recommend cutting costs and saving. It may be tough for a while, but real estate always pays off in the end. For inquiries, advice, or assistance with buying or selling real estate, please call us at 419-466-SOLD (7653) or send an email. We look forward to hearing from you.
