There has been a lot of talk about home prices and mortgages lately. Mortgage rates are increasing, and some experts believe that home prices will drop. While it’s true that mortgage rates are increasing, the jury is still out if home prices will fall significantly. Based on economics and historical data alone, home prices or anything for that matter cannot continue to rise at the rate they have been over the past couple years. However, it is unlikely that prices will drop in any significant way anytime soon. This isn’t to say that individual markets on a local level won’t see a big price drop, but generally speaking a big decrease is not likely.
What about homebuyers? Is now a good time to purchase a home or should you wait it out? Don’t let the higher interest rates deter you from becoming a homeowner. Mortgage interest is one of the few interests that is still tax deductible, which helps decrease taxes owed from income. While we may not see 3% mortgage rates anytime soon, the current rates floating between 5% and 6% are relatively normal historically. Demand for rentals has increased drastically and when demand increases, you can almost guarantee that rental rates will rise. According to an article published by CNBC, rent prices for single family homes hit a national average of $2,495 per month, which is a 13.4% increase compared to the same period in 2021. Depending on the price range of the home you purchase and interest rate, more than likely your house payment will be equal to or less than that. You may as well be investing in your own asset rather than someone else’s.
Bottom line, don’t ignore your dream of homeownership. A few tips to make sure you are making the best decisions for yourself:
- Get pre-approved with a trusted mortgage lender to know what price range you can afford and works best with your budget.
- Make a list of your must-haves and preferred neighborhoods.
- Work with a reputable real estate agent. They know the market and can help you find the perfect home. They will also assist in the negotiations and contract execution once you find a home.
When looking for that perfect home in Missouri or Kansas, contact a knowledgeable real estate professional from Stutesman Action Realty today, 833.286.8400.