If we were going to use one word to explain today's real estate market, it would be fierce. Sure, interest rates are rock bottom low, something we hadn't seen in a while. This fact might give you the nudge you needed to rush and buy a house. And it is great to buy while interest rates are still so low. However, hold your horses for a bit. While it would be a good idea to get a house now, you must understand what you are getting into. Low-interest rates have also caused a shortage of housing supply. Everyone seems eager to relocate to a more peaceful area, surrounded by nature, into a bigger house, etc. And the result is a highly competitive market and pretty high home prices.

In addition, you may have some reservations as to whether you should purchase a house in today's market. Would brutal bidding wars and the price you pay for a place be worth it? You may be wondering, what happens if there is another housing crash, like the one we saw in 2008? Would you be left standing with a house that lost a third of its value practically overnight? Well, these are the worries everyone has whenever they decide to purchase real estate. Naturally, you buy a home as an investment with a potential resale value if you ever decide to sell. So, the question you should be asking is not whether this is the right time to buy a house but whether it is a suitable moment for you.

And the reason why it is so great to buy while interest rates are still so low is that your purchasing power just got substantially higher. So, it would be best if you took advantage of this.

The question: How long will we continue to see low interest rates?

The situation with current interest rates impacted everyone - buyers, sellers, and homeowners. Since the home values have increased, sellers are in a pretty good position. And it is so not only due to higher home prices but also because bidders will often pay above asking to win the bidding war. And the buyers are forced to do so since the housing supply hasn't been able to keep up with the increased demand, causing the prices to skyrocket. As usual, it is all a game of supply and demand. At the same time, buyers' purchasing power has risen considerably, as we have mentioned, so they can afford a home. And many homeowners took this opportunity to refinance their loans to a lower rate or get financing for renovations.

Some are facing a dilemma and are trying to time their purchase, worried about the repercussions. 

The answer: There is no telling

But how long will this last? Interest rates will likely remain low for a while. In September this year, they rose to above 3%. Nevertheless, it is still very low compared to what we had before. Also, the rates have been around 3% for months now, so this is not a significant change. Still, it's doubtful that mortgage and refinance rates will just shoot up overnight. We are looking at the next two to three years of low rates. Although, the housing market has begun to level up a bit. The rise of home prices has started slowing down. And the builders who raised prices for their services have begun lowering them. The costs are still pretty high, but things seem less frantic.

There is really no telling how long this exactly will last. Forecasts are opposing, actually. Some predict the prices will go up in the next 12 months; others say they will decrease. The scenarios are manifold. Thus, if you are wondering whether purchasing real estate is a good idea now, focus on whether it is a good idea for you. Moreover, focus on what you can afford. 

Ultimately, what you should worry about is whether you can afford your monthly mortgage installment. If you can, then what is happening on the market shouldn't concern you much. As a matter of fact, it won't matter to you.

And why is it so great to buy while interest rates are still so low? Well, as we have mentioned more than once, buyers' purchasing power rose. A lot. And it is particularly beneficial for first-time buyers. And from a buyer's perspective, this situation is fantastic. Parts of the population that can keep their income steady at the moment have begun feeling confident about their economic prospects. And low rates allow them to get into the real estate market and become homeowners.

And although home prices have been rising throughout the pandemic, such low-interest rates still allow buyers to benefit long-term. 

What is the bottom line?

The bottom line is very simple. Given that the situation with the mortgage and refinance rates will linger for the next two to three years, there is no rush. If you don't feel ready to purchase a home, don't pressure yourself. While it is great to buy while interest rates are still so low, remember that people have been buying homes before as well. They have been doing so even when the rates were hardly affordable at 17%. So, slow down and evaluate your individual situation. 

Also, as always, it is imperative to familiarize yourself with the real estate market you are buying in. For instance, CA real estate market has always been hot, and there are particular trends to keep in mind. It's always best to learn as much as you can and carefully consider what homeownership involves before making any rash decisions. Remember, being able to afford to buy a home is very different from being able to afford to own a home. Homeownership comes with its own set of expenses.

Conclusion

Many have finally got the opportunity to become homeowners because their monthly mortgage payments have become so much more affordable. And that is the primary reason why it is, indeed, so great to buy while interest rates are still so low. As for how long it will last, let's just say you have some time to carefully think and explore your options. Low-interest rates are likely to linger for a while.

Meta: This article will explain why it is so great to buy while interest rates are still so low and how long this situation will last. Silver Ring on Persons Hand · Free Stock Photo (pexels.com)