The Real Estate AF Blog - Rates As High As A Cheech and Chong Movie

When Rates Are As High As A Cheech and Chong Movie

I hear the same thing multiple times a week right now. “I can’t because of the rates being so high.” There may be a bunch of other words or flowery phrases, but it all boils down to the same bullshit “reason”. Yeah, I said “bullshit” because if you can do something you should, whatever your reasons for not doing it, they don’t matter. You’re just bullshitting yourself. Having said that… Can you really buy a house when rates are this high? That’s actually the wrong question. The better question is “What can you qualify for and why aren’t you taking advantage of the amazing opportunities right in front of you?”

Huh? You heard me and I’m not going to repeat myself… actually, I am going to repeat myself. There are amazing opportunities right in front of you, but you can’t see them because you’re only focused on the current rate.

Let’s go ahead and do that some more (focus on the rate), but let’s zoom out a bit and look at the historical data. The 30 Year Mortgage Rate in the United States, from 1971 until 2023, averaged 7.74 percent. In fact, it reached an all time high of 18.63 percent in October of 1981, but you’re hung up on the record low of 2.65 percent in January of 2021. I know, I know… You should have or wish you would have bought a home back then, right? Meh. No use crying over spilt milk and that isn’t entirely true anyway. The best time to buy Real Estate is as soon as you can qualify to do so and as often as you can qualify to do so. You can’t go back in time, but you can prevent a future “should have” by pulling your head out of the sand and taking advantage of what opportunity exists today.

Here me out! Did you know that the 2021-2022 market competition for buying a house was so great that many folks were bringing cash to the table and guaranteeing to pay $50,000.00 to $200,000.00 above the appraised value? Yeah, that’s right. The competition for the “cheap money” was so great that folks were paying future prices to get into a house today. Generally speaking, the market didn’t fully realize the effects until Spring/Summer of 2022. Did the buyers who paid higher prices lose out? No, this is real estate, don’t be so dense. They delayed their equity gains by paying a future price today. Not ideal, but they did what they could, when they could, so they won over those who didn’t have the resources, foresight or whatever it took to make it happen… aka the “should have” crowd. BTW, that’s likely you, the “should have” crowd.

What about folks who bought earlier, at a higher interest rate? Did they lose? No, this real estate, stop being dense. *repeating myself as promised* Those who bought earlier were able to secure a home for less money, though at a higher interest rate, and then refi into a lower rate in 2021 (it is currently a similar opportunity). They won because they gained equity, they increased their monthly cash flow, and they stopped paying 100% interest on their monthly housing bill. *See what I did there? I pointed out that renting is a 100% loss of your housing expenditure… and you’re worried about what, 7% or 8% or whatever?*

The fact is, even those who bought at the “top of the market” back in 2008-ish just before the crash, if they held the property, came out way ahead. So, stop saying “I can’t” and start asking “How Can I?” NOTE: If you call me, I’ll help build you a roadmap to home ownership.

In summary, for those who weren’t paying attention or those who have not previously looked at the big picture from 30k feet up. Here are the facts:

• Real Estate Goes Up In Value (Appreciation Is Passive Wealth Gain)

• Rates Go Up, Competition Goes Down (Cheaper/Easier Acquisitions)

• Rates Go Down, Competition Goes Up (Expensive/Harder Acquisitions)

• Paying Rent Is A 100% Loss

• Timing The Market Is A Myth

• The Longer You Wait, The More You Pay

• Buy As Soon As You Can As Often As You Can

• The Best Time To Buy Is AS SOON AS YOU CAN

• Reread The Last Two Lines

Need proof of what waiting costs you? See the 2006 until now chart below, so you don’t become a “should have.”

Written by: Jeryd Smith, Founder of WA Home Hunt and a real estate broker, licensed in Washington State. Is he an idiot or a genius? Who knows, but he is opinionated and that's just what this writing is… his opinion. Nothing more, nothing less.