Why Lower Interest Rates Might Not Be as Good for Buyers as They Seem
Here's Why Recent Interest Rate Cuts May Not Be a "Good" Thing for Buyers In several recent articles about the Fed's decision to cut rates, I've seen writers point out that interest rates have more than doubled since 2020, suggesting this is a contributing factor to one of the most unaffordable housing markets in history. While the first part of that statement is true, and interest rates have doubled since 2020, higher interest rates are not what led to the unprecedented housing prices that we see today. In fact, it’s the opposite. The Early Pandemic Boom: A Double-Edged Sword Back in 2020, as interest rates hit historic lows, buyers were thrilled. Lower rates meant more purchasing power, enabling many to afford larger homes while keeping monthly payments manageable. On the surface, it seemed like an incredible opportunity. However, what most buyers didn’t realize was that these artificially low interest rates would spark unprecedented demand in the housing market. The flood of buyers, combined with limited housing supply, led to bidding wars and intense competition. First-time buyers, hoping to seize the moment, often found themselves priced out of the market by investors from far away—many paying in cash. Home prices skyrocketed, with some markets seeing a staggering 15% increase in value in just one year (2020). This trend continued in 2021 and 2022, with similar double-digit price growth. While buyers thought lower rates made homes more affordable, they didn’t account for the rapid price escalation. A home that was worth $200,000 in 2020 could easily rise to over $250,000 within two years. In essence, lower interest rates made housing more expensive due to surging demand. Today’s Market: Lessons from the Past What does this mean for today’s market? If history teaches us anything, it's that government intervention to lower interest rates rarely makes housing more affordable in the long run. Instead, it creates a buying frenzy that pushes home prices higher. Over the next 6-12 months, if interest rates continue to drop, we could see demand rise again. As rates inch closer to 5%, investors may flood the market, driving prices up once more. So, buyers should not assume that lower rates equate to lower prices. What Should Buyers Do? If you’re looking to buy a home in the next 6-12 months, here are two key pieces of advice: Don’t Let Interest Rates Dictate Your Decision The best time to buy a home is when it aligns with your personal and financial timeline, not when interest rates are low. Waiting for the "perfect" rate could cost you in rising home prices. For example, buyers who hesitated in 2020 due to high competition saw prices increase by 25% in some markets. Similarly, those who waited in 2022 saw price hikes of 12-15% within a year or two, despite slightly higher rates. Be Patient in Your Home Search Buying a home is a process, often taking 2-3 months or longer. Finding the right property requires patience and careful consideration. Beyond just price and size, you’ll want to factor in the neighborhood, school districts, proximity to parks, restaurants, and shopping. Don’t rely solely on online listings—pictures can be deceiving. A home that looks great in photos might feel small in person, while a property with fewer pictures might be a hidden gem. Final Thoughts While lower interest rates may sound appealing, they often bring higher home prices and increased competition. Instead of focusing solely on rates, make a home-buying decision based on your unique circumstances, and don’t rush the process. With the right strategy and support, you can successfully navigate the housing market, regardless of where interest rates land. About Sam Executive Vice President, Embarc Realtysam.wurm@embarcrealty.comConnect on LinkedIn As Executive Vice President of Embarc Realty, Sam drives growth and innovation, expanding the company's reach into new markets. He combines a background in sales with a focus on building systems that enhance agent success and improve the client experience. Committed to Embarc Realty’s vision of delivering personalized service and exceptional results, Sam applies forward-thinking strategies to create value for clients, agents, and partners. Outside of work, he enjoys traveling, fitness, exploring new restaurants, and spending time with family and friends. Guided by his Christian faith, Sam values the strong support system around him.
Nebraska Realty Unveils Embarc Realty: A Modern Approach to Real Estate
Nebraska Realty proudly announces the opening of its first Embarc Realty office in Council Bluffs, Iowa. As the national brand of Nebraska Realty, Embarc Realty introduces a modern approach to real estate, blending innovation with the trusted legacy of Nebraska Realty, established in 1993. The ribbon-cutting ceremony took place on August 7th, 2024, at 511 S Main St, Council Bluffs, IA. The event was celebrated in partnership with the Council Bluffs Area Chamber of Commerce, marking the beginning of a new chapter for real estate in the region. Nebraska Realty’s success has been built on a foundation of trust, integrity, and exceptional service to its clients. As the company launches this new chapter with Embarc Realty, these values remain at the core of everything it does. The commitment to providing unparalleled support to agents and delivering results for clients remains unwavering. "Nebraska Realty has always been about providing exceptional service and building lasting relationships. Embarc Realty takes this mission further by introducing a modern, national brand that will expand our reach and impact," said Andy Alloway, CEO and Owner of Nebraska Realty. "Council Bluffs is just the beginning, and the plan is to bring this innovative approach to more communities across the country." Embarc Realty is launching in two new states: Iowa and Arizona. The company is excited to expand its presence in Iowa, bringing Nebraska Realty’s unmatched service and support to new communities across the state. Additionally, Embarc has begun operations in Scottsdale, Arizona, a vibrant and thriving community that offers immense opportunities for Nebraskans who prefer cacti over snow in January. In both regions, teams of experienced agents are eager to hit the ground running. "Embarc Realty represents an exciting step forward for our company," said Sam Wurm, Executive Vice President at Nebraska Realty. "This launch has been filled with careful consideration and a shared vision for the future. As the real estate landscape continues to evolve, it became increasingly clear that in order to maintain our position as industry leaders, we needed to adapt and expand our model to reach beyond state lines." Building on the success of Nebraska Realty, Embarc Realty is supported by impressive achievements: Over $5.7 Billion in Real Estate Sold: Our dedicated team has helped clients achieve over $5.7 billion in real estate sales and purchases, reflecting the trust and confidence of our valued clients. 30k+ Families Served: The commitment to helping families find their dream homes has enabled the company to serve over 30,000 families, making a significant impact in their lives. 1k+ Skilled Agents: The expansive network of dedicated agents is the cornerstone of the company's success. With their expertise and deep community roots, Nebraska Realty continues to grow and thrive. These figures reflect the achievements of Nebraska Realty since 2020. Join the Team Embarc Realty is actively seeking experienced real estate agents and brokers to join its growing teams. The company believes in the power of bringing people together and recognizes the incredible teams of agents that make up its foundation. Embarc Realty strives to empower its agents by providing the best support, dynamic commission structures, and industry-leading technology and resources. A dynamic environment is offered where agents can thrive with access to industry-leading tools, support, and opportunities for growth. For more information about Embarc Realty and career opportunities, contact our team at info@embarcrealty.com. About Embarc Realty Embarc Realty is the premier real estate brand founded to bring Nebraska Realty’s legacy of excellence to new markets across the nation. Embarc Realty leverages the same commitment to personalized service and exceptional results that has made Nebraska Realty a leader in the real estate industry. Technology-driven and future-obsessed, Embarc Realty offers an innovative and proven method to real estate, delivering consistent results to buyers, sellers, builders, and developers. Currently serving Nebraska, Iowa, and Arizona, Embarc Realty continues to expand its reach.