By Sarah Huber
for At Home Colorado
Regardless of interest rates, jobs change, retirees downsize to main-floor conveniences, couples dream of buying their first home – life goes on. But given today’s market, is it better to wait to buy that new house, sidelining the lifestyle you crave, or is it financially wiser to take advantage of the equity you have now? First Creek Lending president Trevor Bellows shared his experience and expertise to help potential home buyers determine whether to wait, sell or buy.
Wanting to move, yet not sure if you should in today’s market?
“I think there’s a lot of people that are sitting at home wishing they could buy a new home but are being told by the media, or maybe even friends and family, that they are crazy to move in this market,” said Jessica Champlin, Boulder Creek Neighborhoods’ chief revenue officer. “The benefit of Trevor and his team at First Creek Lending is that they can help you determine if you’re really crazy or not.” She continued with a laugh, “Okay, not actually crazy, but they can put numbers to your individual situation and determine what makes sense for you.” While First Creek Lending is the Boulder Creek Neighborhoods’ preferred lender, Boulder Creek buyers may use any lender of choice.
What interest rates really mean for buyers
First, perspective is crucial, Bellows said: “Rates are still low by comparison to the last 40-plus years,” with rates climbing to more than 15 percent in the early 1980s. Bellows explained, “The interest rate on a mortgage is a function of your total payment, that’s it.” And while it’s true that interest rates have risen over the last several months, a bigger rate number doesn’t necessarily mean that a new home is unrealistic. “Instead of looking at the interest rate as a number, we’ll look at it in the context of your gross income, to your down payment, to the purchase price of the new home, among other factors” says Bellows. He continues, “On average the difference between an interest rate of three percent and six percent is seven percent of an average monthly income in Boulder County.” That said, rates are only one of several factors to consider before a move. “Rates are not a function of what your family may need,” said Bellows. For example, an empty-nester living in a home that has four bedrooms, several flights of stairs, and an aging set of appliances may be significantly happier in a new, lower-maintenance patio home that’s right-sized to their needs. “I don’t know of a way to put a dollar amount to that kind of peace of mind,” said Bellows. Again Bellows pulls it back to perspective: “Sometimes folks feel that their lower interest is a badge of honor, something to not be left behind. But if you can’t just as easily state the return percentage on your 401K or other investment accounts, then why are you so tied to your current interest rate?” He added, “Remember you can refinance and remember time – the sooner you get into real estate, especially something more suited to your needs, the better.”
Time is on your side
For potential home buyers in Boulder County, the majority of whom value the lifestyle and amenities that a home tailored to their needs offers, “every year that you wait to buy real estate is another year you lose out on principle reduction, potential price increases, potential interest rate increases and our natural enemy, time,” Bellows said. After all, a year not in the house that fits you best is, for instance, a year away from the schools you want for your kids or the lower-maintenance, main-floor conveniences you’ve been holding out for in your retirement years. Bellows provided another example for buyers inclined to wait for interest rates to drop (always a gamble, he admitted). Applying a conservative estimate of five percent annual home appreciation (Denver’s average price appreciation prior to 2020 was about six percent), a home that costs $650,000 today could be expected to cost up to $683,000 next year. In theory, that’s either a $33,000 higher price tag, or $33,000 in equity, depending on when the home is purchased. “Real estate has historically been a sound investment,” Bellows concluded, “and you’ll benefit from your home’s appreciation” – much more, historically, than you’ll benefit by waiting out the interest rate game. In sum, these numbers suggest it’s to your advantage to crunch numbers with a lender and see if delaying a move is worth it or if buying now is financially savvy.
Consider what you lose by staying put
At Boulder Creek Neighborhoods, Champlin noted that “we work with people every day seeking a new home to improve their lifestyle.” What’s more, many homeowners have experienced significant price appreciation over the past few years, giving buyers the opportunity to take advantage of the equity they have to achieve the lifestyle they want. “Just because rates aren’t what they were certainly doesn’t mean a new home is out of the picture,” offers Bellows. Sales managers at Boulder Creek Neighborhoods walk home buyers through the sales process every step of the way – to find a home that meets their lifestyle and financial needs. No matter the market, “holding onto a home that doesn’t suit your need doesn’t make much sense,” Champlin said. This is especially significant to Champlin because she’s part of a company that emphasizes “lifefullness” – what Boulder Creek Neighborhoods calls “a life fully lived, a home that sets one’s best intentions free.” Between the lending and buying process to moving into an efficient home that meets your unique needs and season of life, Boulder Creek aims to streamline the entire experience and make it as pleasant and convenient as possible. This focus on “lifefullness” is on display in every home Boulder Creek builds, from Lanterns at Rock Creek to their newest enclave, West Edge at Colliers Hill, where lower maintenance conveniences meet main-floor living in exceptionally designed communities. “We encourage our buyers to do their research,” Champlin said. “Whether or not they go with First Creek Lending as our preferred lender, we are here to help them make the ideal choice for their situation and find the home that fits their lifestyle.” To learn more about First Creek Lending and to connect with a loan originator, visit firstcreeklending.com. To learn more about the conveniences of lower-maintenance living in a Boulder Creek Neighborhoods home, visit livebouldercreek.com or call Boulder Creek’s online concierge at 303.309.0088.