New reports are showing that home prices have increased since 2021 after home value appreciation, tax re-assessments and mortgage rate increases are factored in. That doesn’t mean it’s not a great time to purchase a home. Here are some reasons why:
New homes are starting to be built again, closings are down, and more home buyers aren’t coming in with cash offers so there’s less likely you’ll have a bidding war, especially ones that waive contingencies. There is a single family home crisis that’s keeping prices high right now, but millennials are feeling that a home purchase is a solid, low risk strategy so many who saved some of their funds from not eating out during the pandemic will be looking for homes to purchase.
Currently mortgage interest rates are much higher than the previous two years at an average of 5.46% which can make a typical mortgage payment increase by about $633 per month. While these rates seem high, there is a potential for interest rates to increase as the year goes on. For those that have been renters for years, home ownership allows for mortgage income tax reductions which allows up to 100% of the interest you pay on your home to be deducted from your gross income.
Banks and mortgage lenders have federal guidelines to follow unlike landlords who can impost rent increases as they wish. Many people are choosing to purchase a home and build long-term wealth than paying someone else’s mortgage off for them.