If rates are too high swipe left

brick and brownstone turret
Turret with brick, brownstone, and granite.

Mortgage interest rates are too high and so are home prices, which rose due to high demand and low rates.  Some real estate professionals are advising their clients to buy a house even though rates are 7%ish.

“Marry the house, and date the rate”.  This catchy phrase has become popular advice and a catchy phrase since the Spring of 2022 when mortgage rates increased to 20-year highs.

The phrase “Marry the house, and date the rate” means you’re committing to a long-term relationship with the house you love.  But you can dump the interest rate when you refinance.

Not so fast. Rates will remain high for a few years and it will take a few years just to build some equity at today’s prices. In fact, you can’t really date a rate. Well maybe you can but you don’t get to just decide when to date another rate.

When a borrower refinances to a new rate they start all over making mostly interest payments. People who have been laid off generally can not refinance. There are fees and closing costs too. In most cases, a borrower would need to own the house for at least three years and rates would have to go down by 2%. Good luck with that.

When my husband and I bought our first house rates were over 8.5%. At the same time houses were less expensive back then and our monthly payments were just a little more than rent.

We can not assume that home values will always rise and that rates will go down soon.  Housing prices can go down or stay flat and rates can go up.  In fact, sometimes renting makes more sense than buying. A home buyer could date an apartment and eventually marry the right house at the right price.

Typically the real estate agents promoting this phrase “Marry the house, and date the rate” either don’t know any better or are a bit sketchy.

Instead of dating the rate, swipe left.


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