Are you looking to buy your first home or ready to move up to your next home? Do you wonder if you waited too long to make the move? Don’t worry; now is a great time to buy a home in Tucson.
You’ve likely heard that interest rates are up, and maybe that’s made you wonder if you should wait for rates to drop before buying. Don’t wait. Yes, rates are up, but the rates we saw for the past few years were very unusual and not typical interest rates for mortgages. Where we are now, while it feels high, is historically good interest rates for home mortgages. We may never see 2% home interest rates again. Don’t wait for them now. If you buy now and rates drop in the future, you can always refinance your mortgage at the new lower rate and reduce your monthly payment. Refinancing is a good option if rates fluctuate. But if you continue to wait and rates continue to go up, as they have recently, you could end up wishing you’d bought a home when rates were 5 or 6%. It’s possible rates could go up more in the future. We don’t know. In the 1980s, home mortgage interest rates were double-digit – above 10% interest. They can go up from where they are right now, or they could go down – they’ve done both over the years, but we’re still at fairly historicallylow interest rates.
Home inventory is lower than normal but higher than during the pandemic. More people are looking to move, and homes are still selling quickly. There isn’t the frenzy there was in 2020-2022, and that’s a good thing for you as someone who wants to buy a house right now. Over the past few years, we saw a real estate market unlike any other in history where homes were selling the first day or first weekend; with multiple offers, people were competing against 10-15 other buyers to try to buy a home. People were offering way above the asking price for homes, and in some cases, they were doing risky things like waiving the right to a home inspection or asking for repairs to be made before closing. Some were waiving the appraisal – meaning they were willing to pay more than the house was worth – this is not good for you as a buyer. The market was crazy, and the competition made it very hard to find a home you liked and bought.
Things have slowed down a bit now, and there’s more chance to find the right home and less pressure to offer above the asking price or waive your protections like the inspection and appraisal. You have a better chance of getting a fair deal on your home purchase today than you did a year ago, and that’s good for you.
Buying a home is still an excellent investment long term. Your home should appreciate each year that you own it. Historically, we’ve seen about 8% appreciation year-over-year for real estate. If you buy a home now, you lock in your price and can start earning equity as you own the home over the years.
Another benefit to buying a home now is that it helps protect you from increasing rental prices. When you buy a home with a fixed interest rate mortgage, you can control your housing costs, and housing is often the biggest expense you have each month. Rental rates are going up. Your fixed mortgage payment doesn’t increase year-over-year (unless your property taxes or home insurance go up). This gives you more control over your income and expenses long term.
Finally, your mortgage interest is deducted from your income taxes when you own a home. You don’t get a tax deduction for rental payments, only mortgage interest.
Yes, interest rates are up, and even with that in mind, it’s still a great time to buy a house. If you want a home in Tucson, please contact us today. We’d love to help guide you through the process and get you into the right home.
