Why Waiting Could Cost You?
If you’re waiting for mortgage rates to drop back to 5% before you buy a home in SoCal, it’s time for a quick reality check.
Right now, rates are stuck in the mid-6s (around 6.4%). It's frustrating, but sitting on the sidelines might actually be the most expensive move you can make.
Waiting for 5%
Here is the problem: the exact second rates drop to 5%, a floodgate of buyers will rush back into the market.
Because we don't have enough homes for sale in Southern California, that sudden rush will spark massive bidding wars. You might get a lower interest rate, but you’ll end up paying $50,000 to $100,000 more for the actual house just to win the bid.
Use the Seller’s Money
Right now, homes are sitting on the market a little longer (about 40–50 days). This gives you leverage you won't have later.
Instead of waiting for the market to drop the rates, you can ask the seller to do it for you through a 2-1 Rate Buydown.
Year 1: Your rate is slashed by 2% (down to 4.4%).
Year 2: Your rate is slashed by 1% (down to 5.4%).
Year 3: It goes back to the standard market rate.
The seller pays for this discount upfront. If market rates drop during those first two years, you can refinance into a permanent low rate. If they don't, you still bought the house at today's price without competing against 20 other buyers.
Marry the house, date the rate, and use the seller's money to get a discount today.
