Many people wonder if they should buy now or wait for interest rates to drop. Although interest rates are higher, the reality is that if you're pre-approved by a lender, you can afford the mortgage. No one can predict the future; interest rates could rise even further. It's also important to note that high interest rates haven't affected the market; home prices are still rising.

While we can't predict the future, we can make our best effort to understand the current market. That's what will inform us to make the best decision about whether it's a good time to buy or not.

Here are some things to consider:

Supply and Demand

Supply is the amount of a specific good or service available in the market. Demand is the amount of that good or service that customers want to buy. Both supply and demand are influenced by the price of goods and services.

In the real estate market, lower interest rates created higher demand for homes, as more people were pre-approved to buy homes. The supply of homes on the market was low, and as a result, homes that went on sale were under contract within the first 24 hours. This created a seller's market, where sellers had the opportunity to set a higher price for their property and even get more than the asking price for their home, as many people were interested in buying. The result was a competitive market, which made it especially difficult for first-time homebuyers to acquire a home.

However, this is no longer the case.

Less Competition

When interest rates were low, there were more qualified buyers, which increased competition, as we saw several competitive offers for each listing, with many offers exceeding the asking price by hundreds of thousands of dollars. Although interest rates were lower, most people ended up paying higher prices for their homes. Today, with current national average interest rates at 6.89% for a 30-year mortgage, according to the latest Freddie Mac Primary Mortgage Market Survey, there are fewer qualified buyers in the market. This means there is less competition when searching for your home, so you are in a better position to negotiate with sellers.

The Market Is Beginning to Balance

It is said that for the real estate market to be balanced, there should be a six-month supply. In recent months, the market has started to stabilize, with approximately 3.5 months of supply. This means there are more properties to choose from and a greater opportunity to negotiate when buying your home.

Increase Your Financial Wealth

If you're currently renting, you're already paying a mortgage—just not your own; you're paying your landlord's mortgage, who is increasing their financial wealth while you're not increasing yours. It's time to grow your own financial wealth. Each payment you make is divided between principal and interest payments. Each payment reduces the principal of your loan, which builds equity. You can then decide if you want to access this equity through a home equity loan, during a refinance, or if you decide to sell your home. Even better, you might decide to rent out that property and become a landlord while getting another property for yourself.

So, buying a house now allows you to enjoy the benefits of homeownership both today and in the future.

Giovanna O. Kennedy is a Real Estate Broker affiliated with Slifer Smith & Frampton. For more information, visit her website AspenValleyRealty.com or email her at [email protected].