Why You Should Be Buying Even as Home Prices are Rising

Why You Should Be Buying Even as Home Prices are Rising

Transcript Snippet: “

Tego:

You got to, that’s why I, I lob that softball up to you, and now you can just, you know, take a big swing at it.

Tracy:

Sure. The beauty of home ownership and why people should be buying even as home prices are rising, is you’re locking in your monthly housing payment or housing cost, right. For 30 years alone with a fixed rate for 30 years. So when you’re in a rental, the rates can go up every, whatever they want. Yeah. You know, based on your contract. So generally every year and, and the only thing on home ownership that goes up is your taxes. You know, taxes can go up 3% a year by law in our area and your homeowner’s insurance mm-hmm <affirmative> and then of course there’s the maintenance of keeping a house up. Yeah. But you’ve locked in that payment for 30 years. Right? Yeah. And so when we talk to home buyers right now where they’re saying, well, we, we wanna wait because interest rates have gone up and I go, well, they’re still so affordable historically.

Tracy:

But think about it this way. If you wanna lock in your interest rate right now, and if they go up, yay, you’ve locked in the interest rate. Mm-hmm <affirmative>, which they do expect them to keep going up. But let’s say they do drop at a point below where you’ve locked it in and you went ahead and purchased your home. Um, you can refinance into that lower rate. So if the rates do go down, you can refinance back into that lower rate and take advantage of it, but at least lock it in where we’re now. So if they go up, you can feel good about it. And you can take advantage of that appreciation. That’s expected by all the top economists in the country, including the one sitting next to me.

Tego:

Well, yeah, the, the, you know, there’s been a lot of obviously conversation about inflation lately. Right. Right. And we all know, right. We all feel it every day we put, put fuel in our vehicles and go to the grocery store. Um, you know, the thing that’s the United States is very unique in having this thing called a 30 year fixed rate mortgage. That is not a normal thing around the country. We around the world, you mean around the world. Yeah. I’m sorry. Thank you. Uh, it is, it’s something pretty special that we have that allows people to lock in their housing costs for a very long time. So, you know, even in Canada, oh, I was

Tracy:

Gonna say Canada,

Tego:

Right.

Tracy:

I mean, it’s, you do five years at a time. Right. Right. And, and you have to refi it to whatever the new rates are.

Tego:

Yeah. And if anybody’s done commercial real estate loans, it’s very similar to those type of deals where it’s a reset every five years. Um, so, so yeah, just, I, I, I think again, we have to keep it in perspective. And when we talk about this, this really high home price appreciation, we still have to CA compare to other markets which have also seen even more home price appreciation around the world than, than the United States. Inflation’s everywhere, man.