Inflation Shouldn’t Deter You From Buying a Home! Here’s Why!
The National Association of Realtors’ (NAR) chief economist, Lawrence Yun, recently said the rising inflation rates shouldn’t worry any prospective homebuyer.
His reasoning was that home prices have been a very strong hedge against inflation in the last 50 years. Home values continue to outpace, match, or in the 1980s and 2000s lag just behind rising interest rates.
Though threats of rising interest rates may stem the increase in home values from double-digit percentages to a more modest 5.2% in 2022 (as predicted by the California Association of Realtors), the growth of a real estate asset will still be a fiscally smart investment.
Home prices are consistently reaching record highs, and NAR expects over 6 million home transactions this year, the highest number since 2006.
Interest rates on 30-year fixed-rate mortgages are expected to rise to around 3.7% this time next year (they just dropped below 3% last week) which could give some potential homebuyers some pause, but the mortgage payments will still be “very manageable” relative to incomes.
The housing market is a strong, driving force in today’s economy. It has been a sweet spot for both buyers and sellers as mortgage rates remain at historic lows and a light housing inventory has homes sold not long after hitting the market, often with multiple offers over asking.
Frustrated home buyers shouldn’t feel too discouraged, though. Yun believes the inventory will pick up starting in the Spring of 2022 as some pandemic and economic-related factors force people to sell their home.
The King Team Can Help You Line Up Your Financial and Real Estate Goals
We’ve got the experience and resources to help you evaluate your financial goals and find and find home financing that works for you. Real estate is one of the best investments you can make in your life, and during a time of higher inflation, that still rings true!
Give us an opportunity to speak with you and connect you with great financial planners and mortgage lenders, or let’s just talk about the current market and where we see trends going! Our entire goal is to help you find what you’re looking for in real estate at the best moment possible. Get in touch today!