REAL TALK WITH JULIE CABLER

Timing Your Home Purchase: Interest Rates, Home Prices, and Your Life Circumstances

• Julie Cabler, PhD • Season 2025 • Episode 2

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Should you buy a home now or wait for rates to drop? This question haunts potential homebuyers across Central Texas, and the answer isn't as simple as many clickbait articles would have you believe. Diving deep into this crucial decision, we explore the delicate dance between interest rates and home prices that fundamentally shapes our real estate market.

Remember when mortgage rates were in the jaw-dropping 2-3% range? Those low rates created a feeding frenzy where homes flew off the market in days, often selling $50,000-$100,000 above asking price with multiple offers. Today's higher rates have cooled that competition, giving buyers breathing room to negotiate and actually think before making life-changing decisions. The crucial insight? While you can always refinance when rates drop, you can never go back and purchase at yesterday's prices.

The rent versus buy calculation has become increasingly compelling for Central Texans. With average single-family rental rates between $2,200-$2,600 monthly, renters are spending over $26,000 annually without building equity or receiving tax benefits. That same payment could potentially support a mortgage on a $325,000-$350,000 home. Over five years, the financial difference is staggering – renting means $130,000+ gone forever, while buying builds wealth through equity and appreciation.

Beyond numbers, we discuss how personal timing factors often outweigh market conditions. Your growing family, desired school districts, or need for stability don't align with interest rate fluctuations. The wisdom in real estate follows a simple adage: "marry the house, date the rate." First-time homebuyer programs (available to anyone who hasn't purchased in three years) and the Homes for Heroes program offering 0.7% back to teachers, military, first responders, and healthcare workers can make homeownership more accessible despite current rates.

Ready to run the numbers for your specific situation? Reach out today to see if now is your right time to buy, regardless of what the market is doing. Subscribe for next week's deep dive into luxury home selling secrets!

Speaker 1:

Hi friends, welcome back to Real Talk with Julie Kavler, the show where we cut through the noise and give you the real scoop on buying and selling real estate here in Central Texas. I'm your host, julie Kavler, realtor with eXp Realty, and today we're diving into one of the biggest questions on every buyer's mind Should I buy now or should I wait? If you've been scrolling online, you've probably seen strong opinions on both sides. Some say you'd be crazy to buy now with the rates where they are, and others say waiting will only cost you more. It's enough to make your head spin, but don't worry, in today's episode I'm going to break this down into simple terms. We'll look at interest rates versus home prices, run some real rent versus buy math specific to Central Texas, and then talk about something that matters even more than market timing your personal situation.

Speaker 1:

So grab your coffee and let's get into it. So I want to start today with the classic debate rate versus prices. So here's the reality. Mortgage rates are like the thermostat of a housing market. When rates go up, buyer demand cools because people's monthly payments get higher, but when rates go down, the opposite happens. Suddenly, more buyers rush in, competition heats up and prices start climbing. Think back a couple of years ago, when rates were in the 3% range. I remember doing many home closings where people got 1.75% interest, 2% interest. It's almost insane to think about that today. So, yes, monthly payments were lower, but the buyers were lining up around the block. Homes in Central Texas were flying off the market in just days, often with multiple offers way over asking price. That kind of competition meant buyers were paying premium prices, sometimes $50,000 to $100,000, even more over the listing price. I remember when I was looking for my home gosh, I'm trying to think when that was back in 2017, and the rates were so good that there were so many multiple offers and we bid probably about $25,000 over asking price and were paying cash and we were still turned down because the sellers did not believe that we had the cash to purchase the house and we weren't able to provide them with a document until Monday. This was actually a late Thursday night that we made the offer and they went ahead and closed with somebody else accepted an offer on the Sunday before our Monday time rolled around. We were pretty disappointed about that. So in those situations, houses go really fast. So now we're going to fast forward to.

Speaker 1:

Today Rates are higher, which feels painful, but the flip side is that competition has eased, homes are sitting on the market longer, buyers have negotiating power again. Maybe you can ask for seller concessions. Maybe you can actually take time to think before making an offer. That's something we didn't see in those frenzied years. So when someone asks, should I wait for rates to come down, my answer is well, it depends, because while you may snag a lower rate later, you could also face high home prices and more bidding wars. And remember, you can always refinance a loan later, but you can't go back and buy a house at yesterday's price. So now we've got to think about the renters. So let's talk about renting versus buying and let's get really practical.

Speaker 1:

Rents in central Texas, especially around Austin and San Marcos and even smaller towns like Wimberley, have been climbing steadily. The average rent for a single-family home here is often around $2,000 to $2,400 a month, depending on location. I'm going to say it's closer to $2,200 to $2,400 a month, depending on location, I'm going to say it's closer to $2,200 to $2,600 a month. Anyhow, we're going to use $2,200 a month for our math. So that's over $26,000 a year.

Speaker 1:

And the question is what do you get in return A roof over your head yes, but no equity, no tax benefits and no long-term stability. Yes, but no equity, no tax benefits and no long-term stability. Your landlord could raise the rent next year or decide to sell the property altogether. So let's flip it up. If you put that same $2,200 in a mortgage, depending on the price point, you could be in a home valued at around $325,000 to $350,000. Instead of paying off someone else's mortgage, you're building equity on your own. On top of that, homeowners are often getting tax deductions for mortgage interest, which renters don't get. So here's another angle. Think long-term. If you keep renting for the next five years at $2,200 a month, that's over $130,000 gone out of your pocket. But if you bought, even if the home appreciated just 3% per year and many areas in Central Texas have averaged much higher than that you could easily gain that much more in equity while also paying down your loan. So the key takeaway rent feels safe in the short term, but buying has the power to build your wealth over time.

Speaker 1:

So what are some personal factors versus market timing? So let's talk about something most people overlook your life matters more than the market. Here's what I mean. The market doesn't care if your family is growing and you need more space. It doesn't care if you want your kids in certain school districts or if you're tired of moving every year. Those things aren't reflected in mortgage rates or price charts, but they're very real in your life.

Speaker 1:

I've had clients who've waited, trying to perfectly time the market, and in the process they spent two or three years renting. During that time, prices went up, their rent went up and they were frustrated. Another story about that situation is my own daughter and her husband own a home in Phoenix and they decided to sell it a couple of years ago I'm going to say maybe about three or four years ago and he was definitely, you know, bent on the fact that housing prices were going to drop. And so he's saving his money and waiting to buy a better and bigger home for his family. Since that time they've had a baby and in the meantime they were renting an apartment. Well, housing prices did not go down and now the rates are even higher and they're still renting and they don't have enough room for themselves and their new child. So, unfortunately, I don't think that was a very wise decision on their part, but they were hopeful and that didn't work out for them. So I think buying is always the best way to go over renting in the long run. I've had clients who bought when rates were ideal, but they were ready personally. Maybe they had a new baby on the way or they wanted a yard for their dogs, and they've never regretted it.

Speaker 1:

The truth is, the best time to buy isn't necessarily when the market looks perfect. It's when it aligns with your needs, your finances and your goals. So here's a question that I often hear a lot what if I buy now and then rates drop later? Well, the answer is you refinance. There's even a saying in real estate marry the house, date the rate, find the home that works for your life now, and if rates drop, you can always refinance and bring your monthly payment down. But if you wait and home prices rise, you can't go back in time and repurchase that same home at the lower price. I know that sounds a bit condescending, but you want to keep that in the forefront of your mind. That house is going to be gone and you're not going to be able to purchase it. So at this point in time, I'd like to say that I feel that buying is definitely beneficial.

Speaker 1:

We have a lot of programs in Texas for down payment assistance for first-time homebuyers and, by the way, a first-time homebuyer is anybody who hasn't purchased a home in the last three years. It's not a lifetime title. So there's a lot of you out there that don't realize that you're eligible for down payment assistance programs. We also have Homes for Heroes program where we give back 0.7% of the purchase price of the home just as a thank you. So if you're a teacher, a firefighter, you're in the military, a police officer or an EMT, a healthcare worker, give me a call and let's talk about your eligibility for that. It's really not a lot of red tape and there's no gimmicks involved. If you meet the criteria of one of those occupations I just named and it doesn't have to be a current occupation, it can be one in the past then you automatically can qualify for the 0.7% return, return which is given to you in the form of a check about two weeks after closing, and it again is 0.7% of the purchase price of your house. What's the catch? The catch is you got to use me as your realtor and you'd want to do that anyway. So you can give me a call to line that up right now at 512-777-8874.

Speaker 1:

Anyhow, at the end of my show, I always like to talk about recruiting. I work for eXp Realtor. My ability to track these trends and help clients make smart timing decisions comes from eXp's cutting-edge data and collaboration with agents nationwide. If you're an agent listening and you want access to that kind of information and support, I'd love to chat about how eXp can give you an edge in your business. I'm always excited to sponsor agents who want top quality information, access to high-level tools and an international referral base.

Speaker 1:

Exp is all over the world now, and so we're very excited to have access to other agents in other countries as well as other states. So referring and getting referrals is something that we do often. We also have a gosh what do they call it, I'm not going to remember, but we have a program where you can share in the revenue Ah, that's it Revenue sharing program where you can share in the commissions of anyone that you sponsor into the program and that doesn't come out of your pocket. Exp pays that, and so that's an exciting way to earn passive income. So you can just I mean all I have to say excuse me for my tongue tied mouth today. You know you just can't beat EXP. So again, give me a call or send me a message.

Speaker 1:

You can go to my website, which is wwwjuliecabblerrealtorcom. On my website you can see that you can click on home listings. You can see all the homes that are available under our brokerage and, believe me, there's a ton. You can also look at leases that are available in our area, because some of us aren't ready with our down payment or ready to move forward on a purchase, and so we can help you with leasing and finding the home that you're looking for. So thanks for joining me on today's episode of Real Talk with Julie Kavler. If you're wondering whether now is the right time for you to buy, reach out. I'd love to walk you through your specific situation and give you clarity. We can put pencil onto the paper and figure out the pre-approval numbers, and then you'll know just exactly how much house you can afford. So be sure and subscribe, because next week we'll be talking about luxury home selling secrets, what high-end buyers really want and how to position your property for that market. So until then, I'm Julie Kabler, helping you make smart moves in Central Texas real estate.