Why Smart Home Buyers Aren’t Waiting For Lower Mortgage Rates

Hear me out. If you're waiting for mortgage rates to significantly drop before entering the housing market in 2025, you could be making a costly mistake. In this video, I want to share with you why mortgage rates are likely to average in the sixes throughout next year. I want to take a look at some of the hottest housing forecasts hinting at more home price growth. And I want to talk about the opportunity that's right in front of homebuyers today. And here's the thing. 2025 might just be your very year to act because waiting could end up costing you more. And I'm about to tell you why. So let's get into it. In 2025, the average 30-year fixed mortgage rate is expected to hover around 6.34. And the average 30-year fixed today is sitting at 6.72. That's not much lower by my calculation. And in fact, it's still quite a bit higher than the rock-bottom lows we saw just a couple years ago. Compare that with the projected 3.5% rise in home prices next year. You might be wondering, how are you ever going to be able to afford a home? While many homebuyers were waiting for rates to drop, home prices have quietly continued to increase. The national home price growth in 2024 this year is projected to land right around 5.25. This continues to give homeowners record high equity, making it harder for first-time homebuyers to get in. Even in higher cost areas like Denver, we saw a slower but still positive 2.97 average home price growth so far in 2024. Home price appreciation is steady, but man oh man does it add up. I mean, check this out. A 3.5% increase on a $500,000 home means a $17,500 equity growth opportunity in just one year. Over five years with the forecasted national appreciation of a cumulative 27.16%, that's $135,800 in equity, money that builds your wealth. And in hot markets or higher home prices like here in Colorado, those numbers add up even higher. Keep in mind that this equity wealth opportunity is on a much smaller down payment. For example, if you put 5% down on that $500,000 home, you have a 543% growth in five years time on your initial $25,000 down payment. Like crap, that's a lot of money. Oh wait, did I forget to ask? Sorry, I got ahead of myself. Would you do a quick favor and hit that thumbs up button down below and subscribe to this channel? I want you to never miss a weekly housing and mortgage market update. Also remember, sharing is caring. Like help someone who's stuck thinking that they can't afford to buy all while helping someone else, i.e. their landlord, build their equity stockpile. It's time to jump in. All right, let's circle back to mortgage rates. While they're expected to hover around 6.34%, which really isn't sexy, the combination of steady mortgage rates, proposed tax cuts by the incoming administration, and a continued 4% wage growth propelled by the anticipated stronger economy will make borrowing more affordable. With more disposable income in buyers' pockets, demand is not only likely, but highly probable to increase in 2025. I mean, we're already seeing how even a small rate drop pushes mortgage purchase application up 5% to 12% week over week, as small adjustments to affordability drives demand. What also drives stronger demand is timing and demographics. Come on, it's been more than four years from COVID's onset. Plus, we're slowly moving on from the uncertainty of 2024's election. And consumer confidence and strong retail sales is demonstrating a strengthening economic competence. On top of that, there's a surge of first-time homebuyers just waiting to jump in. Post-pandemic, first-time homebuyers have aged from 33 years old, now 38 years old is the average first-time homebuyer. For the next three years, birth rates 38 years ago are increasing dramatically. This means more competition with more buyers, pushing prices even higher. And let's not forget that massive wealth effect that's taking place in the markets today. In fact, it's mind-blowing. I mean, the stock market's at a record high fueled by technology and AI. Cryptocurrencies have added $1.9 trillion in wealth this year alone. $1.2 trillion of that is just in the last month alone. And current homeowners are sitting on record-breaking mountains of equity. For younger buyers, especially those 18 to 29, their 29% of the ownership of crypto wealth is turning into spending power. And this group is ready to make moves on big purchases, like homes. And that's not just a trend, it's a huge opportunity for the housing market. I mentioned earlier the average forecast for the United States home price growth is expected to rise around 3.5%. What I didn't mention is the highly respected Apollo Global Management Group just released a forecast that feels a little bold. It's a 10.8% appreciation in 2025 alone. But when you examine it, it's actually grounded in real factors. They cite nationwide low inventory, continued strong wages, and record high investor cash flow are all primed to push prices even higher. If you're considering buying, this should be a warning call. Yet, even if we stick to the more conservative 3.5% national average, the opportunity to build wealth through real estate is undeniable. If you're financially ready, now is the time to act. Today's market still offers negotiating power on price, closing costs, and even on contingencies. As we move into 2025 and demand ramps up, those opportunities will fade. Acting early could mean locking in your dream home while the competition is still manageable. Let's talk about leverage. Real estate isn't just about buying a home, a roof over your head. It's about using your money to control a valuable asset. With 5% down on a $500,000 home, your $25,000 investment can grow substantially as property values increase. With many 18-49 year olds singing the praises of cryptocurrency, skimming a little off the top and diversifying into real estate will provide long-term stability and growth against the more volatile crypto and equity markets. Now, real estate is a long game. That five-year appreciation forecast of 27.16%, I mean, that's not just a number. It's a strategy for creating generational wealth. Homeownership is stability. It's a hedge against inflation, and it opens the door to passive income through rentals and refinancing opportunities. The earlier you start, the more time your investment has to grow. Here's the bottom line. 2025 could be your year. With slight drops in mortgage rates, wage growth anticipated, and rising home prices, the opportunity is clear. Acting now, before demand spikes, puts you in a stronger negotiating position and gets you in on the equity gains sooner. Every year you wait is a year of potential wealth building you might miss out on. It's time to make it happen. Whether today is your day, or sometime next year, if you've been waiting, let's talk about your next steps. Let's put together a plan. Drop your questions in the comments below. I am here to guide you. And if you want even more housing and market insights, check out this video I have linked on the screen I'll see you next time.