1. More Homes Are Coming to the Market
Earlier this year, the number of homes available for sale fell to an all-time low. In recent months, however, housing supply has started to trend up. This is good news for buyers who crave more options. Odeta Kushi, Deputy Chief Economist at First American, says:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
2. Buying Is More Affordable than Renting
According to data from realtor.com, median rental prices just reached their highest point ever recorded. Let’s compare today’s median mortgage payment to the median rent.
According to the National Association of Realtors (NAR), the latest data on homes closed shows the median monthly mortgage payment is $1,255. By contrast, the median national rent is $1,607 according to the most current data provided by realtor.com (see graph below). That’s a difference of $352 dollars each month.
If you’re a renter, it may be time to consider purchasing a home so you can lock in your housing expenses for the life of your loan and avoid future increases.
median monthly rent prices
(Source: realtor.com, NAR)
No Data Found
3. Mortgage Rates Are Still Low
Last year, we saw the lowest mortgage interest rates in recorded history as they fell below 3% for the first time ever. This season, they’re still incredibly low compared to the historic norm. According to the latest quarterly forecast from Freddie Mac:
“. . . while we forecast rates to increase gradually later in the year, we don’t expect to see a rapid increase. At the end of the year, we forecast 30-year rates will be around 3.4%, rising to 3.8% by the fourth quarter of 2022.”
Today’s low mortgage rates help boost your purchasing power, but it’s unlikely they’ll last much longer. Buying sooner rather than later is the best way to get more house for your money.
4. Home Prices are Appreciating
Investopedia defines appreciation like this:
“Appreciation, in general terms, is an increase in the value of an asset over time.”
Over the past year, we’ve seen home prices rise across the country. And according to expert forecasts, that appreciation will continue through 2025.
This should help you feel confident that buying a home this year is a strong long-term investment.
If you’re worried about what that means for affordability today, remember that current mortgage rates help boost your purchasing power and keep your monthly payments more affordable.
expected rate of home price appreciation through 2025
Based on a survey of 100 economists, investment strategists, and housing market analysts (Source: Home Price Expectation Survey 2021, Q2)
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Bottom Line
Let’s connect if you’re ready to build so we can get your journey to homeownership started.