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PERSONAL FINANCE
Delaying your house hunt? Here’s what to do while you’re waiting for mortgage rates to come down.
New York Life | July 11, 2024
A surge in mortgage rates has caused more than a 30% drop in home buying and selling across the U.S. over the last 18 months.1 For many would-be house hunters, it’s simply too expensive to buy a property under these economic circumstances.
But the desire to move won’t necessarily go away – so, what to do in the meantime?
Here are three productive steps you can take as you patiently wait for more favorable conditions in the housing market.
Organize your finances
- Budgeting for future expenses can help you plan for your property purchase. Consider what costs you may face, whether from raising kids or planning for retirement, and factor in headroom for additional expenses.
- Boosting your credit score is a proactive way of increasing your chances of securing a mortgage offer with favorable interest rates. Make sure you’re paying your monthly credit card bills on time, using no more than 30% of your limit, and not applying for too much credit at once.
- Saving for your downpayment is a useful way of killing time until you’re ready to buy. By gradually adding to your nest egg, increasing contributions where possible, you will be able to maximize your downpayment, which means borrowing less and qualifying for better mortgage rates.
Research the market
- ou may have your mind set on one location, but you can also look at other areas while you wait. This may give you the opportunity to find properties that meet most of your criteria but at a more affordable budget or discover new picture-perfect neighborhoods that feel like home.
- Analyzing house prices can help pass the time as you wait for mortgage rates to stabilize. It can be useful to compare the prices of similar properties based on the features you’re interested in, such as location, size or age. And don’t just focus on the asking price; check out what homes actually sold for to get a realistic idea of market value.
- Visit different property types that may help your budget stretch further. From townhouses to bungalows and apartments to condos, you may find a property that you would have previously discounted on paper, but that in person feels right.
Tweak your lifestyle
- There are practical ways of preparing for your house move well in advance. Take the time to start decluttering your possessions and working out what you want to take with you to your new home.
- Revise your daily budget on an ongoing basis and try boosting your savings. Consider eating out less or putting off larger purchases. Even small adjustments can make a big difference in the long term.
- Home improvements can increase the value of your existing home and provide more funds for your next property purchase. In the meantime, that freshly painted living room or new shed in the backyard are yours to enjoy.
Don’t just sit around waiting for rates to come down. Take advantage of the time by getting a better handle on your finances, a better understanding of the market, and making some lifestyle changes to save up for a larger down payment. Don’t have time to wait? Read our article for advice on buying a house amid higher mortgage rates.
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Media contact
Kevin Maher
New York Life Insurance Company
(212) 576-7937
Kevin_B_Maher@newyorklife.com