By: Brian Wells | Metro | Published August 28, 2024
METRO DETROIT — With inflation reportedly slowing and the Federal Reserve seemingly expected to begin cutting interest rates as early as September, several local real estate professionals believe now is a good time to purchase a home or refinance a mortgage.
Dave Petrouleas, a real estate agent with eXp Realty servicing Wayne, Oakland and Macomb counties, said that whether or not people should buy or refinance their mortgages depends on their situations.
“The first thing I ask them is where they’re coming from; that’s the important thing,” he said. “Then I try to figure out, OK, let’s kind of match that up with the goals of what they’re trying to accomplish.”
Petrouleas, who has spent over 30 years in real estate, said he believes the next few years will be “banner years” for homeowners and buyers.
“I would tell you right now, if they’re in a position to purchase, it really presents a great opportunity,” he said. “Right now, prices have kind of stabilized. They haven’t decreased.”
With prices stabilizing, he said, there’s more inventory on the market, so homes aren’t being priced so high that buyers are being priced out.
When interest rates are expected to drop, Petrouleas said, mortgage companies will often factor that in ahead of time.
“They kind of price in that future drop a little bit ahead of time,” he said.
Robert Weltman, a broker with Max Broock Realtors in Oakland County who also has more than 30 years of experience, said approximately a third of home purchases in Oakland County are made with cash, which can also push buyers out.
“Those people that are fortunate enough to be in that position, they’re kind of pushing out the people who need to get a mortgage, and even if they put down more than the 20%, they don’t get that house,” Weltman said.
Mike Martin, who owns Arcadia Lending in Clawson, said that regardless of what rates might do, he rarely recommends holding off on buying.
“We never really recommend holding off, because all you’re going to do is lose out on more rental payments going to nothing,” he said. “It’s always a good time to buy. Being a homeowner is the best thing in America. It’s the American dream to own your home.”
Leslie Doran, a real estate agent with Christie’s International Real Estate in Rochester, also thinks now is a good time to buy a new home.
“I believe now is the best time to buy a home,” she said in an email.
Doran said there are currently homes on the market that are priced spot-on with today’s pricing and some that are not. But the overpriced homes, she said, are sitting on the market longer and causing the sellers to adjust in ways the market hasn’t seen in several years.
“Buyers have more options today, so why not put yourself in a position to get the best house and best price today and then refinance once rates change again,” she said.
Doran believes interest rates will soon be under 6%, which will cause more buyers to enter the marketplace.
“More competition, less negotiations,” she said.
Petrouleas said some homeowners might be on the fence about a new mortgage because they’re already at a good interest rate. He thinks it’s more of a twofold approach, and that the lower interest rates will bring out more buyers but also entice people to sell if they’re looking to move into another home.
Petrouleas also said that with interest rates expected to drop, now is a good time to buy a home and plan to refinance it later. When rates go down, prices go up, he said, so some homeowners might see a quick appreciation.
“They bought it now at a competitive price, at a good value, and then later on, they get the better interest rate,” he said. “So there’s an old slogan, ‘You date the rate and you marry the home.’”
While Weltman also agreed that it depends on the situation, he said he wouldn’t recommend many people refinance right now. Many homeowners already are locked into an even lower interest rate.
“Most people do not want to touch that low-rate mortgage, and you know what? We may never see those rates — those low rates we had several years ago — we may never see that again,” he said. “It just may not ever happen again.”
Even though we might not see interest rates in the 2% or 3% range, Martin said rates are lower now than they have been in the last few years.
“If you got your loan last summer, our rates are lower now than that,” he said.