I often get asked if it’s a good time to buy real estate. My answer is usually “yes – when you look at things from a long-term perspective”. You can take a stab at market timing during the course of a year or two but it might be just as easy to get it right as to get it wrong. If you are in the Central Texas area, you can most likely count on continued appreciation. During the last 20 years, there has been only one year that real estate didn’t appreciate in our area. What does continued appreciation mean for you when considering a home purchase? It means that the $800,000 house you may be considering purchasing today in 2022 could cost you $1,021,000 in 2027 if the average appreciation is just 5% . Waiting may cost you over $221,000!
Now let’s talk about interest rates. Yes, interest rates are higher than they have been in several years and we have been spoiled the last few years with interest rates in the 3% range. I doubt we will see that rate again in our lifetimes. Historically a 5% to 6% interest rate is very “normal” and it wasn’t too long ago that it was considered a great interest rate.
Bottom line is that a higher interest rate may reduce our buying power and you will need to consult with a mortgage professional to see if you need to adjust your price point. However, if you wait too long, the same house you are looking at today may appreciate beyond your range in years to come.
Check out this article from Independence Title that adds some more insight into this topic. And as always, if you have any real estate questions or are ready to make your next home purchase, please contact me! Remember, you can search for properties by using my website: property search.