Competition.

Let me start by saying, I empathize with the fact that interest rates impact affordability. Many feel priced out. I hear you.

But there are two sides of every coin.

While I don’t have a crystal ball, my very best educated guess is that if interest rates drop significantly (as has been predicted) there will be an influx of active buyers.

More active buyers means more competition.

More competition tends to mean higher prices and less favorable terms.

If you’re sitting on the sidelines because of interest rates, consider speaking with a lender (comment CURIOUS and I’ll send over a few of my trusted lenders).

Here’s what you’ll want to know:

Let’s say you’re looking at a $750,000 home right now with a 6.75% interest rate. Rates drop and now you are able to secure a 5.75% rate, but because of increased competition, the price of a similar home is now $800,000. You’d likely be looking at a higher monthly payment even with the lower rate.

It’s a conversation worth having. Comment CURIOUS and I’ll send over a list of trusted lenders.

Share this with someone who might benefit from it.

— Lori Mode, a Sacramento area real estate agent.

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