Some home buyers say higher interest rates are helping the housing market
(CBS DETROIT) - Some people in the market to buy a house said that even though the interest rates are more than double, they would prefer to buy right now as opposed to when the interest rates are low because it was such a buying frenzy.
"Go put a bid down, and there were 10, 12, 15 bids before you could even get one in. And it's like you weren't going to get that house," said Shelly McGuigan. "There were bidding wars. It just went up 20, 30, $40,000, and we're not going to overpay like that for a house. We want the fair rate, and now we can negotiate with, you know, the sellers now and get that fair rate."
Now, Shelly McGuigan and her husband, Bryn McGuigan, can finally take their time and look for a house. They looked at one in West Bloomfield and were very optimistic that they could purchase it.
Part of that buying frenzy was due to historically low-interest rates during the height of the COVID-19 pandemic, that was in the 2% range. But now, interest rates are much higher.
"There are in the sixes. It it's going to depend largely, though, on buyer's credit scores, their debt-to-income ratio down payments," said Re/Max Nexus real estate agent Janelle Palleta.
Palletta said buyers' habits were much different during that time.
"It was pretty much desperation," said Palletta. "They were making offers you know, 10, 20% over list price. They were waiving inspections, waiving appraisals. I mean, there were quite a few things that they were doing just to be at that top of the list to get a home."
Paletta said higher interest rates are helping to balance the market.
"I think it's more neutral. There are also options to buy down rates. There are also ways where when we make an offer on the home to ask for seller concessions to go towards those buy-downs as well," said Palletta.
For the McGuigans, this is a market they feel comfortable buying in. Even though they love they loved the West Bloomfield home, they are still going to keep their options open and look around.
"Whatever I end up buying, I'm not going to feel like, Oh, I paid way too much because it's going to drop so much farther down in the markets," said Bryn McGuigan.