Fall 2022 Housing Market Update
Buy now or wait! This is the question on all potential homebuyers’ minds
this fall. Over the past few weeks, the mortgage interest rates have soared
to a 14-year high. Excessive government spending combined with surging
energy costs and rising inflation has caused many would-be homebuyers to
lean toward the wait side of that argument. But is this really a bad time to
purchase a new home? Maybe not.
First, there is no way to predict the bottom of home prices for any
recession. If the economy continues to struggle, it’s likely that home prices
will continue to drop, offering better sales prices. But at the same time,
inflation is still rising, and the Federal Reserve has clearly indicated they
will raise interest rates as needed to cool this trend. This means that while
home prices may come down some, the cost to borrow money will also
rise; for homebuyers on the fence, they are hoping that the lower sales
price will outpace the rising interest rates.
The truth is there is no way to know this.
Therefore, is this a good time to buy a home? Yes, if the home buyer finds
the right home. There are three important things to consider. One, rising
inflation will affect rent prices and a stable mortgage payment is a great
hedge against increased housing costs. Two, buying a home allows the
new homeowner to start building equity immediately. Finally, a mortgage
can be refinanced when the economy recovers, home values recover, and
interest rates come down. So, potential homebuyers should not shy away
from buying a home, if they find the right fit for their needs.