10/04/2022
Build wealth and protect your future..
DID YOU KNOW THE AVERAGE MORTGAGE RATE SINCE 1971 WAS 7.76%
It is a funny thing about rates - they change. Low rates go higher and high rates go lower. You know what hasn't changed is that real estate values since the beginning of time have appreciated year after year (sure there was that one housing bubble 2007, but that was unique and far different from today). This is the key reason why "home equity" on average makes up 2/3 of a home owners "Net Worth" according to Kiplinger.
Rates should not determine if you buy or not today. There is a direct correlation between Inflation and Mortgage Rates. As inflation rises so do long term mortgage rates and then when inflation drops rates follow. The FEDs are expected to have inflation under control but there will be pain first and a recession. What history has shown for the past 100 years and last 9 recessions is that home values remain stable and increase during recessions (and this one will be no different especially due to the tremendous imbalance between housing supply and demand).
Home values are expected to increase 4-6% over the next 12 months.
You know what else, many homebuyers forget that their income usually grows every year and that home ownership often provides great tax benefits.
So buyers should take advantage of home equity growth now and remember their mortgage payment will get more comfortable every year due to their income increasing, tax benefits, and refinancing to a lower rate. In fact many analysts believe 30 year fixed mortgage rates will be back in the 4's within the next 12-24 months.
There is more exciting news. The ROI (return on investment) is far greater buying a home than even the stock market since it is predicted the stock market will be stagnant for the next 1-2 years. Look at it this way, purchase a home for $500,000 with 20% down or what is $100,000. The home appreciates 5% equal to $25,000. The return on investment for buying the home is 25% - where else are you going to get that ROI?
Marry the home, date the rate, build wealth, increase net worth, get tax benefits, get a higher ROI, avoid the cost of waiting, grow your income, refinance, and get a more comfortable payment.
