Home prices and mortgage rates are on the rise, but so are wages. The home affordability index (the cost of a home vs. wages) is only slightly higher than it was in 2021 and 2020. Depending on the area, home prices have risen 10-18%, but wages have risen around 14%. It may cost a bit more to buy a home now, but the sacrifice is worth it. Projections show that home values will continue to rise, so if you own a home, you will benefit from the appreciation in the form of equity. This equity could allow you to refinance into a better loan down the road, pay off high-interest debt, start a new business, or go back to school.
As consumers, we are all feeling the effects of inflation in food, gas, travel, products, and especially housing price increases. If you are holding off on buying a home until prices come back down, you may be waiting for a long time. While you are waiting, your rent is likely to increase. Reports show average rents are up 12-16%, depending on your area, if you have a new lease, or are renewing. Also, if you buy now and opt for a fixed interest rate mortgage, your loan payment is fixed. Sticking to a budget is much easier when you know your housing payment will not increase every 6 months or a year.
Each year, about 30 million millennials turn 30. They are earning higher incomes and they are sick of paying exorbitant rents. Even if a fraction of these folks decide to buy homes, we will not have enough inventory. New home starts are projected to be around 1.7 million in 2022, and there are not enough existing housing units to make up the difference. So, if you decide to wait to purchase, be ready for lots of competition.
The dream of homeownership is alive and well in the United States and although there may be more hurdles along the way, the rewards have never been higher. Homeownership creates family stability, stronger communities, and is a great way to build wealth. My parents always said the best things in life are worth fighting for – buying a home is one of those things.
How Golden Lenders Can Help You Choose the Right Home
Golden Lenders helps home buyers in Colorado, Florida, Ohio, and California understand the different types of mortgages that are available and provides loans to help people achieve the dream of homeownership. Since the specifics of which mortgage to choose is dependent on a variety of factors, we encourage you to call us for more information and find out which is right for you. Need more information about what to do before buying a second home? Call us! Our number is (303) 482-2361, or you can send us a message.