Thelife- Borrowing costs have tumbled, but prospective homebuyers shouldn't see how low they will go.
- "Timing the market is never good," Bank of America's Matt Vernon told Business Insider.
Mortgage rates have tumbled at the fastest pace since the 2008 housing crash, but prospective homebuyers shouldn't wait to see how low they will go, a Bank of America executive said.
Instead, if you're ready to buy now, you should do it.
"Timing the market is never good," Matt Vernon, the head of consumer lending, told Business Insider. "It's really when you're financially ready, emotionally ready, and, ultimately, you find that home that fits your dreams and/or your needs."
Homebuyers this year have been battered by a slew of headwinds, as mortgage rates, elevated prices, and a tight inventory have kept many on the sidelines.
But they may already have started heeding Vernon's advice. Between April and October, the amount of consumers willing to wait for the market to improve fell from 85% to 62%, a Bank of America report found.
In that timeframe, the average 30-year fixed mortgage rate rose from 6.28% to just under 8%, hitting a high not seen since the early 2000s.
Meanwhile, home prices have been growing at a quicker pace than household income, making the market more unaffordable, with average earners committing a historic 41% of their pay on housing costs.
These factors have driven down optimism in the current market. A Fannie Mae survey conducted from early-to-mid November found that only 14% of surveyed consumers considered it a good time to purchase a home, the report's lowest level on record.
Still, the desire for homeownership has remained high, Vernon said. In fact, Bank of America's survey found that 53% of respondents consider home ownership the leading definition of financial success.
It also ranks high in a broader definition of success, above choices such as raising a family or reaching investment goals.
More housing market relief is expected next year, when the Federal Reserve will likely start cutting interest rates. But some analysts have warned further downside may be limited with mortgages ranging between 6% to 7% next year.
For now, it's difficult to tell how the latest slide has affected homebuyer sentiment, especially as December is traditionally a low volume month for the mortgage industry.
That said, a clear downtrend in rates should be enough to push some back into the market, given that they'll be more confident about refinancing in the future, Vernon told Business Insider.
"But it's really an individualized answer that really is based upon the needs of that underlying homeowner as they enter into the market," he said.