Whether you are a current or prospective homeowner or renter, and regardless if you are considering buying or selling, it is important to know how the current state of the market impacts your daily decisions while living in Austin. We understand the importance of providing you with a transparent outlook on the health of the local market so that you can make informed real estate-related decisions. Our blogs are here to provide you with the data to create clarity. Read below to gain valuable market insights and connect with one of our local agents today!
Higher mortgage rates have made homeownership more unaffordable for many prospective buyers. However, this winter presents a unique opportunity for those who have been sitting on the sidelines waiting to buy a home. The paradigm shift in the real estate market is happening now as home prices moderate and sales lull. Home sellers are experiencing less demand and more days on market, motivating them to offer more buyer-friendly terms including mortgage rate buy-downs.
The answer to the question, “Is now a good time to buy a house,” is different for every person or family considering buying. So let’s put into perspective what is happening right now in the housing market and explain why now could be more favorable for buyers:
- While mortgage rates continue to remain high in the mid 7’s, economists are forecasting 6.9-7% for 2024.
- Inventory is a massive problem we haven’t seen since the 1940s, which will keep upward pressure on prices for the long term.
- Buyers have options, like leveraging mortgage rate buy-downs and knowing they can refinance when rates do come down.
Is Buying a Home Still a Good Investment?
Public sentiment remains strong, with Gallup polls indicating real estate as the preferred investment for 11 consecutive years. As homeowners' net worth surpasses renters by 40 times, real estate continues to be a stable, long-term investment with the potential for wealth-building, and here are three reasons why:
1. Hedge Against Inflation and Long-Term Appreciation
Historically, home price appreciation has outpaced the rate of inflation. There are years, like 2022, when inflation outpaces home price appreciation. However, when you zoom out to look at a longer timeframe, the return you earn from home ownership tends to be higher than inflation. Looking back, housing prices trend upwards, with the average annual increase in home values being roughly 4%.
While there is a risk of prices flattening and/or falling in the short term, we don’t expect a severe decline like in 2008. No one has a crystal ball to know when rates will come down, but we do know, when rates come down, it will put upward pressure on pricing.
2. Build Your Equity
The principal from your mortgage payment builds equity every month. If you’re questioning whether to buy a home due to today’s cooling market, consider the long-term financial benefits. As a homeowner, equity increases your wealth.
3. Gain Tax Benefits
You can receive mortgage interest deductions where you can write off the interest you pay per your tax bracket.
Pro Tip: The Mortgage Reports states, “The idea that you have to put 20% down on the house is a myth.” The truth is you may be able to get grants or low to no-interest loans to help with your down payment or closing costs. It is worth checking to see if you qualify. Down Payment Resource, a company that tracks these programs across the country, makes it easy for you to quickly search programs and check your eligibility.
BOTTOM LINE: Now is the time to talk through your options. Trying to time the market can present challenges. Sit down with a local real estate expert and discuss your home search or home sale goals so you can have the insights you need to make the best possible move forward. Learn how these small bright spots in our cooling market present unique opportunities to buy or sell.
In a transitioning market, informed decision-making is crucial. Understanding trends and forecasts helps both buyers and sellers navigate the Austin housing market with confidence. For personalized insights, connect with Scott at (512) 660-3343 or [email protected].
Don’t forget to follow @scottpaterealestate on social media for breaking market updates, graphics, videos, and more at https://scottpaterealestate.com.
