wealthofgeeks.com

5 Reasons To NOT Buy a House Right Now

The common mantra is that renting throws away money while purchasing a house builds equity and, thus, wealth. Homeownership does add to your wealth, but like all other asset classes, valuation matters in real estate.

In fact, there are many reasons to buy a home, but there are relevant arguments against home ownership as well.

Looking at the track record of the past, people purchased homes and condominiums, thinking prices would continue their upward arc. But unfortunately, they did not, and when these trends changed, it took many years for prices to recover.

According to realtor.com, the number of US active listings has declined from about 1 to 1.5 million before the pandemic to about 500,000 – 600,000 during the pandemic, although the number has now started to rise. Lastly, housing and rental vacancies are down to about 5.6% and 0.9%, respectively, in 2021.

House Prices Are Near a Record

The result is higher home prices. The median listing price in 2017 was $250,000 to $280,000. That price leaped to $435,500 in August 2022, slightly below the record from May to July of the same year.

The 30-year fixed rate mortgage (FRM) is now over 6%, the highest rate since 2008. Many first-time homebuyers have not experienced rates this high.

Mortgage Rates Are the Highest Since 2008

The 2017 Tax Cuts and Jobs Act (TCJA) nearly doubled the standard deduction to $24,000 from $12,700 for those in the married, filing jointly, status. The deduction is now $25,100.

The Tax Advantage Is Lower

The US Treasury website lists the 1-year rate at almost 4%. So, if your brokerage allows bond purchases, take advantage of the highest interest rate in more than a decade.

Interest on Savings Is the Highest in Year

Swipe up to learn more!

Preparing Financially for College Without Breaking the Bank

Find Your Vacation Thrills With the Natural Beauty of U.S. National Parks

Discover  more from  wealthofgeeks.com