Experts say don't wait for interest rates to drop before you buy a house (2024)

Mortgage rates have fluctuated a lot in the last year and interest rates are still climbing. No one knows for sure when the housing market will improve, and not everyone is waiting until it does.

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Home mortgage interest rates are now close to 7%, making it a really tough time to buy a house. And prices are still way higher than they were a few years ago. But some people are still buying. NPR's Juma Sei reports on why.

JUMA SEI, BYLINE: Sheriff Benson has lived in apartments all his life, not just with his family growing up in Dallas but in college, graduate school and post-grad, too. Now a pharmacist in Columbus, Ohio, Benson is 30 and doesn't want to live in tiny apartments anymore.

SHERIFF BENSON: If there was a great time, I've basically already missed it. And if I waited around for another perfect opportunity where prices were low and rates were low, I might be waiting another lifetime.

SEI: He started looking early last year, and the goal wasn't just to find a place that he could call his own. Benson's parents are from Nigeria, and he's the oldest of his three siblings.

BENSON: Being a first-generation, you know, American, there's the idea that I want to take care of my parents when I'm older. And I can't do that renting someone else's space.

SEI: Buying his own place would also make him the first homeowner in his family, which is important to him as a Black American.

BENSON: In terms of, you know, building generational wealth, which you hear over and over again, it sounds like a cliche now. But, like, if you're going to pay money to live somewhere anyway, why not own the place you stay?

SEI: But the supply of available homes nationwide has been unusually low for years. During the pandemic, that tight supply, combined with super-low interest rates, sent home prices through the roof. From 2019 to 2022, they rose about 40%. Prices have begun to fall just a little - about 2% since this time last year - but today's much higher interest rates still make buying just about as expensive as it's ever been. So a lot fewer people are looking to buy right now.

DONALD PAYNE: This time last year, it was just crazy. It was a feeding frenzy. It's almost like, you know, piranha in the water, and the water was just bubbling and everything.

SEI: Donald Payne has been selling homes in Columbus for over two decades. He says things aren't as hectic as they were during the pandemic, but still, his advice to buyers is the same.

PAYNE: You see it. You like it. You try your best to lock it down right now 'cause if you sleep till tomorrow, it's gone.

SEI: Lisa Sturtevant is the chief economist at the real estate agency Bright MLS. She says across the nation, first-time homebuyers are finding new, nontraditional ways to make things affordable, like living with their parents.

LISA STURTEVANT: So we're finding that people are having to get more creative, whether it's through multigenerational living or buying in parts of the country that folks maybe hadn't expected to because they can now work remotely.

SEI: She also says that a lot of people will need to be creative because she doesn't see prices falling much further.

BENSON: This is the living room here. A nice open space.

SEI: In Columbus, being creative paid off for Sharif Benson. He's found this duplex that he's buying with a friend. Their plan is to live in one of the duplex's units and rent out the other. As a pharmacist, Benson also got a special kind of health care professional loan. It's the only way he's been able to make this dream a reality. Touring the property one last time before closing, Benson says he's excited for the years ahead.

BENSON: It feels like a surreal moment coming out of - or what feels like coming out of the pandemic in being able to take a little bit more control of my life. And it gives me a lot of hope and a lot of happiness, actually.

SEI: In a small room in the corner of the top floor with a window overlooking the street, Benson says he's overwhelmed that soon, he's going to call this corner of southeast Columbus home.

BENSON: I think this will be my neighborhood. It's a lovely neighborhood - my neighborhood.

SEI: Juma Sei, NPR News.

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