Home prices are high, but the cost of buying is still affordable.
In case you haven’t heard, the supply of homes in our market is at an all-time low and buyer demand is increasing. Naturally, when there’s high demand and low supply, prices rise. This logic applies to all commodities, and real estate is no different.
This means homes must be less affordable than ever, right? Wrong. Last year, if you would’ve purchased a $250,000 home at an interest rate of 3.73%, your monthly mortgage payment would’ve been $1,155. After appreciation, if you were to purchase that same home at $263,750 at an interest rate of 2.87%, your monthly mortgage payment would be $1,094.
“WHEN YOU FACTOR IN THE ACTUAL COST OF OWNING A HOME, YOU’LL SEE IT’S MORE AFFORDABLE THAN EVER TO BUY NOW.”
Basically, you’d save $61 simply because mortgage rates are much lower now than they were last year. While the market still favors sellers due to the inventory shortage, when you factor in the actual cost of owning a home, you’ll see it’s more affordable than ever to buy now.
So don’t let anyone tell you it’s a bad time to jump into the market and buy a home. If you’re ready to take that step or have any real estate questions at all, don’t hesitate to reach out to me. I’d love to help.