Renters Beware
This week’s tip is for you renters out there watching this video. And if you are not a renter but you know of someone that’s renting, please forward on this video, share it because this is very, very important information.
This is a warning to renters right now that are perhaps wanting to buy a home, they think that they can buy a home, but holding back because they’re waiting for the housing market to crash, waiting for a better opportunity, for a more opportune time to buy. This is a warning to folks that are thinking that it might be better to wait.
Now, of course, no one has a crystal ball, but the thing that I wanted to point out this week and I’ve talked about it recently in recent videos is about the problem we’re seeing with inflation. Inflation coming in for the Consumer Price Index at a 40-year high, at a number we haven’t seen since 1982. And for those of you that were around in the ’80s or you remember the ’80s or have read about the ’80s if you are younger, this is a period where in 1982 we were entering into a high inflationary environment for a number of years. Now, who knows if that’s going to happen or not.
This is my warning to renters is when there’s high inflation, that affects rents that makes rents go up. And we’ve seen that over the last year. Rents as a nationwide average, I’ve seen statistics, something like 11% nationwide that rents have gone up, which is a very large number for one year. So that is a warning to renters that you could see substantial increases in rents.
The other thing to keep in mind is that inflation historically leads to higher interest rates. So that means if you’re waiting to buy, you’re likely going to be looking at a higher mortgage payment down the road because of higher interest rates.
So these are two compelling reasons to look at what buying a home right now might look like.
Now, if you’re going to continue to rent and you’re going to be at the mercy of higher inflation, you’re going to likely see your monthly rent payment in increase. Whereas if you buy a home right now, you lock in a 30 year fixed interest rate, your payment is not going to increase. Now you might have some changes because of property taxes and homeowner’s insurance, but your payment stays generally level over the course of time. So you’re basically locking in your “rent” for the long term.
The other cool thing about a mortgage payment is a portion of that goes towards the principle balance of your loan, essentially contributing to the equity of your house. So it’s like a forced savings account. You’re not just throwing that money out the door and giving it to your landlord; some of that is going into increasing your wealth over time by paying down your mortgage.
These are all really good arguments for at least having the conversation of whether it makes sense to buy right now. If you want to look at what your payment’s going to look like, how much out of pocket cash you’re going to be looking at, just give me a call. That’s why I’m here. I’d love to answer your questions. You can also text or email me. Besides that, that’s all I got to say. Heading into 2022, let’s buy a house.
