According to the most recent data from the National Association of Realtors (NAR), total existing home sales dropped 1% in September compared to August and is down 3.5% from 2023. The data also found that the median home price for an existing property was $404,500 in September, which is up 3% annually.
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With conflicting information coming out about real estate as investors anxiously await to see what happens with interest rates, there are many myths swirling in the industry.
Here are seven common misconceptions and myths about buying a home looking forward to 2025.
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Joel Carson, president and principal broker at Utah Real Estate, pointed out that potential buyers are waiting for interest rates to come down before buying, but there are also many others waiting. “One percentage point can make a huge difference in your monthly mortgage payment, but while you wait for interest rates to come down, home prices are creeping up,” said Carson.
It’s important to remember that you’re not the only person waiting for rates to drop and that additional competition could arise if you wait too long. While it’s completely understandable if you’re only looking at your monthly payment, you don’t want to end up paying more for a home because you waited too long.
“From an investment perspective, I recommend buying a home now at its current value. When interest rates come down, refinance. You will save money on the home price and have a lower interest rate,” added Carson.
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The good news is that you don’t have to save up forever to become a homeowner, as there are many options available to help you enter the market. While you may have traditionally wanted to save 20%, this isn’t always an option.
“Lots of people get loans with only 3-5% down, especially with programs for first-time buyers,” said Ray Franz, a real estate investor and the owner of CharterOak HomeBuyers. There are numerous options, like Federal Housing Adminstration (FHA) loans, for those who don’t want to wait until they have 20% saved up to enter the real estate market.
“Sometimes renting makes more sense, depending on your money goals and where you live,” said Franz. You have to decide what works for you right now so that you don’t try to become a homeowner for the sake of it.