An intriguing cliche in the real estate world has become a powerful strategy known as “marry the house, date the rate.” But what does it mean, and is it an excellent approach to consider when buying a home in Raleigh, North Carolina, or any city in the U.S.?

Understanding the “Marry the House, Date the Rate” Strategy

The adage “marry the house, date the rate” emphasizes that you can change your mortgage rate while remaining in the same house. Many people believe it’s best to postpone purchasing a home when Raleigh mortgage rates are high, assuming that waiting for rates to drop is the more financially sound decision. However, this thinking may cause you to miss out on the perfect home you want to make your own.

Instead of waiting indefinitely for interest rates to decrease, it might be wiser to take action now. Interest rates constantly fluctuate, and although your initial rate might be higher than desired, you can “date” your interest rate and “flirt” with another home loan rate when the market represents a more attractive option. This means that when interest rates eventually come back down, you can refinance to a lower rate and improve your financial situation.

The Importance of “Dating the Rate”

It’s Not a Matter of ‘If,’ but a Matter of ‘When’

Raleigh Mortgage Broker Logan Martini

Logan Martini, Senior Mortgage Strategist with the Martini Mortgage Group, states that when home loan rates decrease again, borrowers can refinance their mortgage and secure a more favorable interest rate for their mortgage while continuing to capture the appreciation of the home. By adopting the “marry the house, date the rate” strategy, you position yourself to take advantage of future rate reductions and potentially save a significant amount of money in the long run while seizing the appreciation. 

Is Now the Right Time to “Marry the House, Date the Rate”?

If you already have a mortgage, it’s always advisable to keep an eye on interest rates and consider refinancing if they drop. Hence, the “marry the house, date the rate” strategy should be deployed in any market, not just in markets with elevated home loan rates, such as the current market conditions.

The opportunity to refinance when rates decrease, serves as a built-in safety net, ensuring that you won’t be stuck with a higher interest rate for the entire mortgage term. Moreover, even though interest rates have reached levels not seen for a long time, they may continue to rise. Delaying your home purchase could prove costly, as future rate increases would impact your affordability. By taking out a mortgage now, you eliminate the risk of being priced out of the market due to escalating rates, and you will be able to lock in your housing costs.

This strategy can particularly appeal to renters who have hesitated to enter the housing market during these uncertain times. Renters cannot recoup their money on rent, whereas homeowners steadily build equity with each mortgage payment. By adopting the “marry the house, date the rate” approach, renters can start building equity immediately, leveraging their monthly payments to accumulate wealth as a valuable asset: a house.

Considering House Prices and Market Dynamics

When deciding whether now is the right time to buy a house, it’s not just interest rates that come into play; you have to consider the cost of the house too! Skyrocketing house prices have also deterred many potential buyers. At the end of Q1 2023, the median sales price of homes in the United States was $436,800, according to the St. Louis Fed. In Q1 of 2021, it was $329,000. This represents a staggering increase of $107,800 in just three years!

However, it’s crucial to consider two essential points regarding current housing prices. 

First, significant price drops are unlikely to occur soon since home prices have stabilized based on Case-Shiller, the FHFA (Federal Housing Finance Agency) data, and CoreLogic. As a primer, home prices climbed in the first half of 2022 and peaked in June 2022. Then in the second half of 2022, there were negligible declines in value; however, in Q1 of 2023, there was a stabilization, and we are now rebounding. 

The recent rebound does not mean a trend; however, it does signal home prices were not retracing but recharging. This sentiment is echoed by the current inventory of available homes for sale is at the lowest point seen in years. The absence of housing inventory for sale and supply and demand dynamics should result in stable prices or potential increases.

Second, high prices and interest rates have dissuaded many potential homeowners, leading to fewer buyers. However, this situation presents opportunities for those in the market to purchase a house.

With fewer homebuyers, sellers need more potential purchasers. As a result, they may be more willing to negotiate on price and terms. By acting now, homebuyers could secure a better deal than in a less turbulent housing market.

Making the Decision: To “Marry the House, Date the Rate” or Not?

Ultimately, the decision to adopt the “marry the house, date the rate” strategy rests on various factors unique to each individual’s circumstances. By carefully considering interest rates, market dynamics, and personal financial goals, you can make an informed choice – the Martini Mortgage Group can help. In addition, they will monitor the markets post-closing so that when it is time to “flirt” with a new rate to lower your cost of homeownership, you will be alerted, and you will miss no opportunity.

If you’re ready to embark on your homeownership journey and want to take advantage of potential rate decreases in the future, it may be the right time to “marry the house, date the rate.” Remember that a well-thought-out mortgage application is crucial to securing your situation’s best terms and rates.

For expert mortgage assistance, Martini Mortgage Group is here to help. Contact us today to begin your mortgage application and take a significant step toward owning your dream home.