Rent Prices Increasing : Reasons to Consider Buying a House

The past few years have seen a boom in the housing market, as many Americans used their stimulus checks and the money they saved during lockdown for a down payment on their first house or to upgrade to their dream home. If you’re looking to make the same move – especially if you’re currently renting and feel ready to buy your first home – this recent story on CBS’s 60 Minutes might have you concerned.

On Q Financial is one of the nation’s leading mortgage companies with a mission to simplify the mortgage process and make the dream of home ownership a reality. With over 400 team members across 47 states, our mortgage consultants can help answer your questions about how to buy a home that’s right for you — and navigate the challenges a lot of people are facing.

Rent and New Home Prices Are at All-Time Highs

Rents are increasing in desirable cities across the country: 35% in New York City, 29% in Portland, Oregon, 31% in Jacksonville, Florida, and 40% in Austin, Texas, just to name a few of the most desirable places to live.At the same time, home prices are rising at a record pace. You might be wondering why this is happening.

There is a severe lack of housing in America, according to the latest research. After the 2008 financial crisis, new home construction slowed to a crawl, and there are approximately 4 million fewer homes than are needed to support our growing population. A lower supply has increased prices across the board.

Increased demand for available homes is also dramatically increasing home prices and rents. People looking for their first home or dream home in the Sun Belt states of Arizona, Colorado, Texas, and Florida have likely noticed that properties are being picked off the market in days or even hours. Many of these purchases are made in cash and without inspection by Wall Street-backed rental home companies.

What is a potential home buyer to do?

If You’re Ready Today, Don’t Wait to Buy Your Next Home

A lot of people who feel like they’re ready to own a home are waiting “until the market settles down” to start looking for a new home. This is a mistake for a variety of reasons, including:

Home prices are not likely to fall any time soon. The dramatic increase in home prices before the 2008 crisis was driven by speculation and “fix and flip” investors. When the market crashed, there were suddenly a lot of homes on the market, and a lot of Americans who were ready to buy their dream home at a very low price. Today, most real estate investors are seeking to “buy and hold” the property, which is why rents are increasing. That makes it unlikely that the number of available homes will increase substantially for the next three to five years.

Interest rates will probably increase over the next few years. If you’ve followed the news, you’ve probably heard about historically high inflation rates – increasing prices for gasoline, food, clothes, and other necessities. One way the government tries to stop inflation is by increasing the interest rate for U.S. Bonds, which effectively takes money out of the economy. Mortgage interest rates are closely tied to bond rates, which means that an extra percentage point or two can cost you thousands of dollars. People who buy homes now are can still benefit from mortgage rates near historic lows.

Buying a home is almost always a good long-term investment. If you were a young person during the Great Recession, you might feel like home ownership is scary. In fact, historically buying a home is one of the safest and most important ways to build personal and family wealth. Home prices could level off or even fall in the short term, but most people own their home for many years. And while you make payments on your mortgage you’re building equity — if you keep renting your landlord is enjoying the benefits.

It Helps to Start with Team You Can Trust

If you feel like now is the time to buy your first home, discover your dream home, or get ready to become a homeowner, the mortgage professionals at On Q Financial can help. We’ve helped thousands of Americans achieve the dream of home ownership by providing loan options that fit their unique needs at a monthly payment they can afford.