with Andrea Hoffmann

Answers to your home and real estate questions.

November 2022

Q: Interest rates have risen significantly. I’m trying to buy my first home. Have I missed the boat?

A: If I’m being honest, the last two years have been challenging for suburban buyers. First, pandemic-motivated urban flight flooded local real estate markets with well-funded––sometimes all cash––buyers. Bidding wars became commonplace, and many buyers had to go through the unpleasant process of losing a few bids before they won.

Now, buyers face the rising cost of borrowing. As of this writing, the average rate on a conventional 30-year fixed mortgage from Bank of America is just over 7%, more than double what it was a year ago. Buyers are paying more for their debt, which means they may need to reconsider their price range as they search. When debt was cheap, perhaps a buyer could comfortably afford a $750,000 home based on the monthly mortgage cost. Now, they may need to settle closer to $500k or even less. 

Should you wait it out?

We get this question a lot, actually. When mortgage rates are high, the demand for rentals rises as buyers consider sitting on the sidelines. But here’s the thing: when rental demand increases, so do prices. We’re seeing people get into bidding wars even on rentals, offering more than the posted rent or even offering to pay several months in advance, among other things. 

Deciding how and when to participate in the housing market is an important financial decision and comes down to your budget, needs and overall financial strategy. Does renting make sense in order to figure out which neighborhoods you like or to get children into a specific school system while you continue to househunt? Or, is it best to buy a place now, even with a higher mortgage interest rate, to avoid throwing away tens of thousands of dollars in rent? After all, you can refinance eventually. 

The choice is entirely yours, and I can make a valid case for several scenarios. Yet, no matter how you slice it, it’s still a tricky time to be a buyer. Now more than ever, the experience and expertise of a licensed real estate agent can be a valuable asset as you navigate and negotiate.  

Q: I heard the gray wall trend is coming to an end. Is that true?

A: I guess it depends who you ask. Personally, I don’t think you can ever go wrong with a neutral wall. In support of that theory, Behr’s color of 2023 is a classic off-white called Blank Canvas. However, Benjamin Moore is spicing things up with their 2023 color pick: Raspberry Blush. My rule of thumb is to give a new wall color a try if you feel so moved. What’s the worst that can happen? You just repaint!    

Get your own question featured in The Home Zone! Email me at Andrea.HomeZone@gmail.com.