Should You Wait for Lower Mortgage Rates Before Buying in the Triad?

• At a 6% rate, you could take oon a loan balance of $333,583
• At an 8% rate, that drops to $272,567
• The swing between those two numbers comes to more than $60,000 in buying power

Buying in the Next Six Months? Build in 75 Basis Points

Cut that window down to six months and the range gets tighter. The middle 80% of six month rate changes ran from -63 to +63 basis points, so the cushion rounds down to 75 basis points. 

Rates stayed within 25 basis points 37.2% of the time here, a bit more predictable than the 12 month window.

For that same $2,000 monthly budget:

• At 6.25%, you could take on a loan balance of $324,824
• At 7.75%, that falls to $279,169
• The difference between the two comes to more than $45,000 in buying power

Buying in the Next 3 Months? Build in 50 Basis Points

Get within three months of closing and the range narrows even more. The middle 80% of three month rate changes ran from -40 to +45 basis points, rounding to a 50 basis point cushion.

Rates moved less than 25 basis points in either direction 49.7% of the time on this window, close to a coin flip in favor of things staying stable. 

For that same $2,000 monthly budget:

• At 6.5%, you could take on a loan balance of $316,422
• At 7.5%, that drops to $286,035
• The difference between the two comes to about $30,000

Here's what that looks like against the median priced home here in the Triad, $316,990 as of August, with a 10% down payment. At a 7% rate, the monthly principal and interest payment comes to $1,898.

See how that payment moves in both directions:

• At 6.5%, it drops to $1,803, about $95 less per month
• AT 7.5%, it climbs to $1,995 about $97 more per month

What You Can Do Right Now to Protect Your Budget

Whichever window you're in, here are a few things I'd encourage you to do before you start touring homes. 

• Run your numbers at more than one rate scenario
• Ask about fallback options if rates move higher, like a rate-buydown, seller concessions, or adjusting your down payment or target price
• Pay down revolving debt where you can. It helps your debt-to-income ratio and gives you more room to work with

I work with some amazing lenders that would be happy to run the numbers for you. That way you can make a more educated decision on what is right for you.

Plan Now So You're Ready When You Find the Right Home

Building in enough room here means a rate move while you are home shopping won't knock you out of your search.

If you're thinking about buying in the Triad in the next year, six months, or three months, let's sit down and run your numbers together before you start looking at homes.

I'd rather help you plan for this now than have you find a home you love and hit a wall at the finish line.