Is Buying a Home Still a Good Investment?

Whether you are a current or prospective homeowner or renter, and regardless of whether you are considering buying or selling, it is important to know how the current state of the market impacts your daily decisions while living in Austin.  We understand the importance of providing you with a transparent outlook on the health of the local market so that you can make informed real estate-related decisions. Read below to gain valuable market insights and connect with one of our local agents today!

Mortgage rates have eased into the mid-6% range, improving affordability compared to last year’s highs. At the same time, San Antonio’s housing supply has risen to 6.1 months of inventory, giving buyers more choices and negotiating power. Sellers are responding with concessions like mortgage rate buy-downs, creating opportunities for buyers who are ready to act.

The answer to the question, “Is now a good time to buy a house,” differs for every person or family considering buying. So, let’s put into perspective what is happening right now in the housing market and explain why now could be more favorable for buyers:

• Mortgage rates recently dropped to 6.2%, the lowest we have seen all year.
• Inventory has reached 5.9 months, and an increase in housing supply is a game-changer for potential homebuyers and sellers.
• Buyers have options, like leveraging mortgage rate buy-downs and knowing they can refinance when rates come down.

Is Buying a Home Still a Good Investment?

Investing in a home is often considered one of the most reliable ways to build wealth and secure financial stability. While the housing market may experience fluctuations, the long-term benefits of homeownership remain significant. Below are several key reasons why buying a home is a wise investment choice.

1. Hedge Against Inflation and Long-Term Appreciation

Historically, home price appreciation has outpaced the rate of inflation. There are years like 2022 when inflation outpaces home price appreciation. However, when you zoom out to look at a longer timeframe, the return you earn from home ownership tends to be higher than inflation. Looking back, housing prices trend upwards, with the average annual home value increasing roughly 4%.

While there is a risk of prices flattening and/or falling in the short term, we don’t expect a severe decline like in 2008. No one has a crystal ball to know when rates will come down, but we do know that when rates come down, it will put upward pressure on pricing. 

2. Build Your Equity

The principal from your mortgage payment builds equity every month. Consider the long-term financial benefits if you’re questioning whether to buy a home due to today’s cooling market. As a homeowner, equity increases your wealth.

3. Gain Tax Benefits

You can receive mortgage interest deductions, where you can write off the interest you pay per your tax bracket.

Pro Tip: The Mortgage Reports states, “The idea that you have to put 20% down on the house is a myth.” The truth is, you may be able to get grants or low to no-interest loans to help with your down payment or closing costs.  It is worth checking to see if you qualify. Down Payment Resource, a company that tracks these programs nationwide, makes it easy to search for programs and check your eligibility quickly.

Now is the time to discuss your options. Trying to time the market can present challenges. Sit down with a local real estate expert and discuss your home search or home sale goals to gain the insights you need to make the best possible move forward. Learn how these small bright spots in our market present unique opportunities to buy or sell.
 

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