Should You Wait for Lower Rates to Buy in Philadelphia?

By John Salkowski

The JRS Realty Group, founded by high-producing Real Estate Broker & Author John Salkowski was built on the notion that the secret to achieving incredible goals and getting true results is to dominate real estate with a team approach.

Higher interest rates are shrinking buying power across the Greater Philadelphia area, and many would-be buyers are questioning their timing. One of them wants to buy a home and asked me in my latest Ask John whether it makes more sense to wait. I don’t think you should wait, and the reasoning has a lot to do with what everyone else is doing.

I work two markets, so some context first. In Pennsylvania, I cover Montgomery, Chester, Delaware, Bucks, and Berks counties, along with parts of Philadelphia County. I also work Southwest Florida, including Naples, Bonita Springs, parts of Fort Myers, Ave Maria, and Marco Island, where most purchases are paid in cash. The question came out of the Philadelphia side of my business, so I’ll focus there.

Higher rates do shrink buying power. With rates running in the 7% to 7.5% range, a financed purchase simply doesn’t stretch as far as it used to. My recommendation is to get preapproved one more time at a lower price point, so you can see exactly what’s available at that level. If lowering your number feels like a sacrifice, that’s the reality of the market we’re in right now.

Falling rates will bring more buyers. I believe rates will come back down eventually, and when they do, you’ll see an influx of buyers enter the market at once. A rush like that drives prices up and brings multiple offers along with it. Competition drives prices up, and right now there’s little to none of it.

Less competition puts you in charge. Buyers who purchase while everyone else waits hold far more negotiating power, whether it’s on price, seller concessions, or a mortgage rate buydown. In most cases, you’ll have the upper hand. I love working with buyers in a market like this, because we’re the ones holding the football. We’re the quarterback, and we’re driving the negotiation.

You can always refinance later. Rates are higher than people are used to, but historically they’re still at a decent level. I don’t think we’ll see the threes and fours again, though I do think we’ll see fives. I can’t tell you when or how much, because I don’t have that crystal ball. When and if that happens, you can refinance. Once that wave of buyers comes back, you’ll be glad you bought when you did.

Don’t follow the crowd. I’m not telling you any of this as a sales pitch, and I don’t need you to buy a home from me right now. I simply want you to avoid doing what everybody else is doing. When most people are sitting on the fence, that’s when you should get off it and start walking the other way. Whether you’re financing or paying cash, this is a market worth being in.

If you have questions about your own situation, let’s schedule a free discovery call. We’ll jump on Zoom and talk through your real estate goals. The conversation becomes your roadmap, your GPS, and your flight plan to get you there safely. Call me at 610-709-5147, email me at john@jrsrealtygroup.com, or visit thejrsrealtygroup.com. The most important decision in buying or selling a home comes down to the broker you hire more than the location, and I’d love to be yours.