Why Waiting for Interest Rates to Come Down is a Bad idea… Here is a Proven Strategy!

Why Waiting for Interest Rates to Come Down is a Bad idea… Here is a Proven Strategy!

Brent Willis, CMPS

Published 2 months ago

2 Reasons that answer the question: Should I wait for rates to come down before purchasing a home?

1. INFLATION MAY REMAIN ELEVATED.
The Federal Reserve’s economic stimulus programs during the pandemic, plus massive government spending during that time created the highest inflation rate since the early 1980s. Annual consumer inflation hit a high of over 8% in 2022. Since then, inflation has declined considerably, with the latest numbers indicating a 4.1% annual inflation rate. Even so, the current annual inflation rate is double the Fed’s target of 2%. If the annual consumer inflation rate drops toward the Fed’s target of 2%, mortgage rates could drop as well. This may not happen in a meaningful way for another year or two.

The good news is that inflation generally causes real estate values to increase. This means that homeownership is still one of the best ways to build wealth in this economy.


2. BOND SUPPLY WILL REMAIN ELEVATED.
Approximately $7.6 trillion of US government debt is scheduled to mature in the next year according to recent reports. That’s an enormous amount of debt that will need to be refinanced at current market rates vs. the low rates of the past decade. This means interest expenses on government debt will increase, leading to more government debt to pay the much higher interest costs.

Not only that, but the costs of mandatory government spending programs like Social Security, Medicaid, and Medicare are increasing at staggering levels with no signs of slowing down. All this means that there will be a massive supply of bonds coming into the market throughout the next few years to pay for that spending. Investors will likely demand higher interest rates on those bonds. This means that interest rates in the broader bond market (including mortgage rates) will likely remain elevated for at least another year or two.

The good news is that interest rates aren’t nearly as high as they were in the 1980s. Mortgage rates hit an all-time high of 18.63% in October 1981, according to Freddie Mac data. People still bought homes in those days, so don't get discouraged by today's interest rates! Did you know... the 50 Year average of Interest rates is around 7.75%? So, we're right there today on that average BUT your have options to mitigate higher rates. See the presentations and Data below for some great strategies.

The presentations to the right, and below, will help explain HOW to Purchase real estate more affordably in this higher rate environment...
TO CREATE LASTING WEALTH... IT'S ALL ABOUT STRATEGY.... NOT RATE!

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Proven Financing Strategies to WIN in Real Estate --
https://brentwillis.lender.marketing/presentation/65896/

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A Rate Buy Down Guide - It walks you through all the various Buy Downs so you can see which is right for you!
https://brentwillis.lender.marketing/presentation/63199

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TOP 5 Reasons to Buy Today --- "Marry the House, Date the Rate"
https://www.willishomeloans.com/presentation/68606/

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Here are 2 compelling Mortgage Strategy Articles, with current market data, graphs and charts, to help you understand the real estate market, Why it's behaving the way it is and How we'll Guide you through it!
https://www.godreamlender.com/article-view/the-federal-reserve-vs-the-housing-market
https://www.godreamlender.com/article-view/why-buyers-have-an-advantage-in-this-market

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What's more important to you, a Rate or a Home? Seriously, what's more important? I can tell you... its the home as the rate can always be refinanced! In the low inventory environment, if you wait for rates to drop, more competition will flood the market and only drive prices up.

Question: If you wait for a low rate BUT you have to pay another $50-150K for the home you want, due to the increased competition b/c everyone else was waiting on lower rates too, have you really won? NO! It all goes back to the age old, and true, economic philosophy of Supply and Demand. You want to move when demand is lowest, which is now, especially if you can structure a seller buy down to achieve a lower rate from the start. If rates drop in the near future, then you can refinance your loan while everyone else is overbidding on too few number of homes.

TO CREATE LASTING WEALTH... IT'S ALL ABOUT STRATEGY.... NOT RATE!

P.S. To See the latest episodes of my TV Show, Financing The American Dream, click the link below... If you know of a great local business we should profile OR a really cool event or cultural experience that needs highlighting, please reach out to me!
https://www.godreamlender.com/the-american-dream-series

Recent Reviews

"Working with Brent Willis and his team was incredibly easy! They walked me through every step, kept me up to date as the process moved forward, and most importantly, delivered the $$$ goods on time!"
– Nishikant T.

5.0

Gordonsville, TN
"I had a great experience. Was always kept in the loop and notified when documents were needed."
– Jacob S.

5.0

Review Verified
Navarre, FL
"Everyone had excellent communication. Brent stayed calm during an interesting experience (due to circumstances out of his control)! He gave good advice and kept us moving forward. He always had a plan B."
– Angela H.

5.0

Review Verified
Navarre, FL
"Great team, great communication!"
– Larry H.

5.0

Review Verified
Old Hickory, TN
"My wife and I were new to the housing market and loan process. The team at NEO made it a smooth and comfortable experience. My wife Chelsie and I in review are beyond grateful for our experience! NEO’s team was always available and responsive to our questions and needs. Zero complaints from the Kagay family! Thanks again!"
– Colin K.

5.0

Review Verified
Old Hickory, TN
"Communication and explaining the process was huge for us since it was our first time."
– Chelsie K.

5.0

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Old Hickory, TN
"Our experience was great because your team was available for us and made this whole process smooth and easy."
– Chelsie K.

5.0

Review Verified
Lakewood, TN

4.2

Review Verified
Panama City Beach, FL

5.0

Review Verified
"I cannot put into words how easy it was to purchase my new house. There was constant communication, and I felt like Brent and his team had my back every step of the way. Everything was done online, so there was not driving back and forth, or lenghty meetings. Closing was the only real time event and it was so smoothe. I look forward to working with Brent and his team long after this sale to help keep my new house in perfect condition. Thanks so much, Brent and team!"
– Mark W.

5.0

Review Verified
Franklin, TN
"Less lengthy emails. More straight forward options and consequences. The why's don't matter as much to someone who is not in the profession."
– Thomas R.

3.0

Review Verified
Miramar Beach, FL
"My experience with NEO Home Loans was top-notch. We had a very short turnaround from property choice to closing and this team made it feel seamless. The communication throughput was proactive and timely. Brent took the time to walk me thru all of my questions thru each phase and the entire team was 5-Star. Our closing attorney (out of state), even made the comment that in here 25 years in the business, this was the best Mortgage company she has ever worked with."
– Kevin F.

5.0

Review Verified
"Brent was fantastic and made this a very simple transaction. I normally have to stay on top of the lenders in a transaction but not Brent. Ready to close 2 weeks early........that Never happens. Thank you Brent for being AWESOME."
– Renda F.

5.0

Hermitage, TN
"I never felt confident in my ability to buy a home until I met Brent Willis. He and his team gave us so much confidence & that enabled us to move forward in our home buying journey. I can absolutely say that Brent is THE person to have on your team. My husband and I are so grateful for his time in educating us and preparing us for this next season."
– Roxana Delaire B.

5.0

Review Verified
Columbia, TN
"Always being available and answering the phone to walk us through the process, to help us understand things, and to calm fears when it felt like we’d never get theough the underwriting process."
– Jon-michael William E.

5.0

Review Verified
Goodlettsville, TN
"Brent orchestrated several transactions that had to work out for the loan to happen. He was both patient and effective bringing together multiple parties to get the loan through."
– Wallace Danley R.

4.9

Review Verified
Nashville, TN
"Really appreciated the team's willingness to respond to any questions that we had during this process. The team also communicated very well to us during this time."
– Porter M.

4.9

Review Verified
"Brent and the team are great to work with! - Great communication all along the way."
– Dillon Bowman .

5.0

"Brent and the team are great to work with! - Great communication all along the way."
– Dillon Bowman .

5.0

Hendersonville, TN
"Clear and effective communication, - We had some hick-ups with the App but I am sure that'll be sorted out as they put miles on the platform."
– Dillon B.

5.0

Review Verified
Nashville, TN
"We are so incredibly appreciative of how hard the team worked in order to close our loan fast… We never expected to be moving and to have this team support mental a lot"
– Kalee Willingham B.

5.0

Review Verified
Nashville, TN
"Everyone involved in my process was immediately responsive and pleasant no matter what was going on. The speedy approval to close in 10 days was incredible and accomplished by consistent pressing through of the whole team."
– Joanne M W.

5.0

Review Verified
Franklin, TN
"Brent and his team were responsive, supportive, and timely throughout our whole experience."
– Angela P.

5.0

Review Verified
Franklin, TN
"Communication! Brent and Linda were always available to answer any and all questions, and explain in detail items that came up. Thank you to the team at NEO for the loan approval process. Brent, you and Linda have been a godsend. kge"
– Katherine Garner E.

5.0

Review Verified
Franklin, TN
"Brent and his team kept in contact and left no stone unturned. They answered questions swiftly and took all of the worry out of the process. I can not recommend them enough."
– Adam S.

5.0

Review Verified
"Brent is fantastic and will bend over backwards to make sure you are taken care of. I recommend him to anyone I can."
– Brett M.

5.0

Watertown, TN
"Linda and Brent are an amazing team helping with the information flow and being proactive with the deliverables. Great team"
– James L.

4.7

Review Verified
Nashville, TN
"Very smooth and easy process compared to other mortgage lenders I've dealt with"
– Cyrus K.

5.0

Review Verified
"Working with Brent Willis and his team was incredibly easy! They walked me through every step, kept me up to date as the process moved forward, and most importantly, delivered the $$$ goods on time! What more could you ask for? Jim B"
– Jim B.

5.0

5.0

5.0

"Working in the real estate business myself, I interact with dozens of lenders every month. In my experience, the best lenders are the ones who proactively communicate with their clients and the realty teams serving them. After all, communication fosters action, and keeping things moving forward is integral to a smooth closing. Brent Willis is one of those lenders. With Brent and his team, I never have to guess where we are in the financing process. I already know, because they proactively communicate every step of the way. This not only provides peace of mind, but also frees up my time because I don't have to chase anyone down for an update. Brent also does something not many lenders do anymore: he will take the time to educate clients and Realtors on the specifics of the home ownership process. Not just during the contract-to-close phase, but guidance and information for after the sale concludes. This puts him in rare company, and easy to recommend."
– Martin K.

5.0

"My team loves working with Brent and his team. We never have to ask for updates and they go over and above with communication and not only meeting expectations but exceeding them."
– Shanda K.

5.0

"More then 5 stars!!! For someone buying a house for the first time and not understanding anything. Y’all answered all my questions, very professional, all super friendly, made us feel comfortable, and everyone envolved was super helpful! Thank y’all, my babies are so excited to have a house to call home!!"
– Ashley H.

5.0

How to Re-Enter the Market at a 750K Price Point

How to Re-Enter the Market at a 750K Price Point

Testimonial from a Realtor/Investor on the Value of the Seller Buy Down Strategy

Sample Buy vs. Rent Analysis at $750,000 - Don't Wait to Build Wealth! -- Let the Data Point the Way Forward!

Sample Buy vs. Rent Analysis at $750,000 - Don't Wait to Build Wealth! -- Let the Data Point the Way Forward!

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We will Proactively Manage Your Mortgage Going Forward! -- No Need to try and time the Market for a Refiannce. We'll alert you!

We will Proactively Manage Your Mortgage Going Forward! -- No Need to try and time the Market for a Refiannce. We'll alert you!

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Want Valuable Advice, Guidance and Planning long after the Closing? We're just built different!

Want Valuable Advice, Guidance and Planning long after the Closing? We're just built different!

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Happy Clients! - Don't take our word for it!

Nashville Host of Financing The American Dream TV Show - Episode on The Brentwood Market and Trisha Yearwood's Home

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