“I CAN'T BUY A HOME IN THIS MARKET!”

Today, we're offering a different perspective, hitting you with some mortgage and real estate knowledge to help you decide your next best move, literally and figuratively speaking. 

So, pop quiz hot shot!  (Extra credit if you know the movie… hint: there’s a bus) 

Let's Talk Mortgage Rates

Q1: Over the last 30 years, what was the average mortgage rate?

A: 7.74%! If you're gasping in disbelief and kicking yourself because you missed those tantalizingly low rates we've seen recently, don't beat yourself up too much. Even though today's rates might seem high, they're pretty on par with historical averages.

Q2: Will rates drop?

A: Well, mortgage rates can be a tad unpredictable. They might drop, remain unchanged, or rise. Without going down the rabbit hole of economics, politics, mathematics, and Nostradamus-like hypothesizing, you can have a plan for each scenario:

If rates drop? Super! Refinancing is in your future. As the saying goes: “date the rate, marry the house.” Just because your initial mortgage has a higher rate than you’d like, it doesn't mean you're wed to it forever. 

If rates stay the same? Fantastic! Your monthly mortgage payments are an investment in yourself, paying down your principal and building your wealth, not your landlord's. 

If rates rise? No worries. You'll pat yourself on the back for locking in a lower rate when you did.

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Renting vs. Buying: The Eternal Debate

Q3: What's the average interest rate when renting a home?

A: Hold onto your potatoes! (extra credit- name the film)  It's a whopping 100%!  Renting essentially means you're paying nothing but interest. Not a single shiny penny of your monthly rent builds you wealth (equity). If you're planning to rent until rates drop, keep this in mind when you fork over money each month that you’ll never get back. 

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Dream Home Out of Reach? Think Again

Q4: What if my dream home is just... too pricey right now?

A:  "The best time to plant a tree was 20 years ago. The second best time is now."  Sure, using the proverb is a bit cliche, but it works! Consider the following to help decide if buying now makes sense for you now, or later:

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Real estate tends to appreciate - While home values differ drastically by location, over the past decade, US homes have appreciated over 4% per year. Meaning the price tag on your dream will likely be higher (much higher even) in a few years.. A $200,000 home now? It might cost you $208,000 next year, and even more the year after.

Homeownership is flexible - Do you envision living in one spot for the next 30 years? Not necessary. Buy a home, let appreciation work for you, then sell it to fund your forever home. Or force appreciation by renovating and improving the home, using your equity to pay for it. Or, rent it out to earn passive income and help offset your mortgage. It's your home, you have options. 

Bravery has its rewards - If the thought of soaring mortgage rates scares you, it also keeps other potential buyers at bay. This could be your time to shine. Fewer buyers mean less competition. Making an offer when others won't? It could be a home run.

So, if you've been hesitant about diving into the real estate market, it might be time to reconsider.  Whether you're in it for a good time and not a long time, or both, becoming a homeowner now could be the best option for you. And finally, just remember, 

“Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.” (final extra credit cinematic reference…Anyone? Anyone?)

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