Why Waiting for Lower Mortgage Rates Might Not Be Best for Relocating Employees

Published: Tuesday, April 2, 2024
Sirva Communications

In a constantly changing US housing market, mortgage rates serve as a critical factor influencing decisions for homebuyers nationwide. Recent trends have shown fluctuations that capture the attention of prospective buyers, with many holding onto the hope that rates will fall to more favorable levels before making their move. This common strategy seems prudent at first, however, this approach overlooks the dynamic nature of the real estate market and the broader economic factors at play.

While it's tempting to wait for mortgage rates to drop, doing so could lead to missed opportunities and increased competition. In a market where timing is everything, understanding the implications of waiting for the perfect moment could be the key to making informed decisions that align with your long-term financial goals.

The Risks of Waiting for Lower Mortgage Rates

Mortgage rates are subject to the ebb and flow of global and national economic currents and are influenced by a myriad of factors, including inflation rates, the Federal Reserve's monetary policy decisions, and international trade dynamics. This complexity makes forecasting mortgage rates a challenging endeavor, with experts often cautious about predicting long-term trends. Other factors include:

Availability of Properties

Real estate markets are dynamic, with the inventory of available homes constantly changing. The perfect home that meets the relocating employee’s criteria today may not be on the market tomorrow. By waiting for a marginal decrease in mortgage rates, buyers risk missing out on properties that fit their needs and desires, potentially settling for less-than-ideal alternatives later.

Competition Increases

A delay in entering the market can coincide with periods of increased buyer demand and dwindling housing inventory, further intensifying the challenge. When mortgage rates do eventually decline, a surge of buyers who have been on the sidelines will enter the market, all competing for a limited number of available properties. This increased competition can lead to bidding wars, driving up prices and potentially offsetting the financial benefits of a lower mortgage rate.

What Does This Mean for Relocating Employees?

For relocating employee’s entering the housing market, the benefits of acting now include:


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Less Competition

One of the most immediate benefits of entering the housing market now is the potential for less competition. In periods of fluctuating mortgage rates, many prospective buyers adopt a wait-and-see approach, significantly reducing the pool of active buyers. This decrease in competition can offer a more relaxed environment to consider options and take the time to find the right property for their needs.

Negotiating Power

With fewer buyers in the market, those who choose to act now may find themselves in a stronger negotiating position. Sellers, eager to move their property in a quieter market, may be more open to negotiation on price, closing costs, or terms of the sale. This can result in significant savings and more favorable conditions for the buyer, potentially offsetting the impact of current mortgage rates.

Utilizing Company Benefits

For those relocating employees who are receiving purchase benefits from their employer, many purchase benefits expire after 12 months, so waiting to buy can mean forgoing those available benefits. Purchasing now can ensure that employees can take advantage of those benefits while minimizing requests for exceptions for things like temporary living, household goods storage, or extending the benefit expiration date.

Emotional and Financial Rewards

Beyond the tactical advantages of buying in the current market, the emotional and financial rewards of homeownership remain compelling reasons to act. The pride of homeownership and the personalization of one's living space contribute to a deep sense of satisfaction and belonging. Financially, homeownership is a cornerstone of long-term wealth building, offering the potential for equity growth and the accumulation of personal assets over time and the stability of a fixed mortgage payment in an inflationary rental market are significant financial advantages.

The housing market is complex, influenced by a multitude of factors that can affect the timing and outcome of your home buying journey. Recognizing the significance of these decisions, it's crucial to arm yourself with knowledge and partner with experts who can provide personalized guidance tailored to your unique situation.


To read the full blog post, please visit the Sirva Mortgage blog.


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