So, you’re interested in buying a home but you’re asking yourself, “Is it a good time to buy?” It’s a fair question because home ownership is the single most important purchase we make in our lifetime. I have been watching three things to answer this question: mortgage rates, equity, and rental rates. First let’s talk about mortgage rates. Mortgage rates are on the rise, I understand that, but they’re on the rise from historic lows compared to the mortgage rates over the past 50 years. We still have access to some of the lowest rates available. In the 70s, rates were at 8.86. In the 80s, rates were at 12.7. The 90s we were at 8.12, and it wasn’t until 2010 that we were at four percent. In addition to that, we are predicting that the rates will stay at or around four percent through 2022, so it would seem it’s still a good time to buy according to mortgage rates.
Next, let’s look at equity. In 2021, we ended the year at 18 and a half percent increases, for 2022, Fannie Mae, Freddie Mac, and Corelogic are all predicting between three percent and nine percent increases for the year for an average at six point one two percent. We are seeing home prices stay steady and still increasing which means that equity is still growing and that is another indicator that it is still a good time to get into the market and to buy.
Lastly let’s look at rental rates. If you have been in the rental market anytime in the last four years, you know there’s some scarcity and rental rates are increasing. They’re going up up up! So if you’re renting, it is a great idea that you look at your rental expense and see what you possibly could buy as you have seen equity is on the rise and you might as well get that equity for yourself and not pay for it for someone else, So if you take mortgage rates, if you take equity, and you take rental rates, it really does seem like it’s a great time to buy!
