ASK THE ATTORNEY: Is Now Still A Good Time To Buy?

Lately, I have been getting questions about the real estate market. One of the most frequent questions is this: “is now still a good time to buy?”

While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still high, remaining around 8%. This news impacted the stock market and has added fuel to the fire for conversations about a recession.

What does this mean for you?

Well, you’re likely feeling the impact everyday as the costs of goods and services climb. The pinch on your wallet and the economic uncertainty it’s creating may leave you wondering: “should I still buy a home right now?” If that’s a question that is top of mind for you, here’s what you need to know.

Homeownership Is Historically a Great Hedge Against Inflation

In an inflationary economy, prices rise across the board. Historically, however, homeownership has been a great hedge against rising costs. 

One reason is that you can lock in your mortgage rate, which is usually the largest portion of your monthly housing expenses. Doing so can help stabilize some of your monthly expenses. Even if property taxes rise and other living expenses increase, at a minimum your monthly housing payment remains the same for the duration of the loan.

If you’re a renter, the ability to stabilize your monthly payments and protect yourself from future rent hikes should be an important factor when you decide whether to buy or to continue renting and paying someone else’s mortgage.  

Not only that, when you rent, your monthly payment is fixed by the terms of your lease, which typically renews every year.  

Inflation is no doubt affecting your landlord as well, so it’s likely your landlord will increase your rent at the end of your lease term to offset the impact of inflation. 

In fact, according to a recent survey by Realtor.com, 72% of landlords surveyed said they plan to raise the rent on one or more of their properties in the next year.

Here's the Bottom Line

Becoming a homeowner can provide lasting stability and can be a reliable shelter in times of economic uncertainty. The best hedge against inflation is a fixed housing cost. If you’re concerned about rising interest rates, let’s talk. 

There are a number of ways to minimize the impact of higher interest rates when buying a home, including things like seller concessions, rate buy-downs, and other grant programs that may be available. 

When you’re ready to learn more and start your journey toward homeownership, let’s connect.