Will home values continue to rise?
Anxious homebuyers and a low supply of homes has led to a hot housing market, with an average home price increase of 25% as of March 2020, but will it continue to rise? T here are three factors that come into play: 1. Mortgage Rates It's simple, low rates = more buyers, high rates = less buyers. Why? Because with lower rates, buyers can afford a higher total loan amount and of course with higher rates, they can afford less. So you may be able to afford a $400,000 home now, but if the rates rise you may only be able to afford a $300,000 home. 2. Inflation Remember when our parents or grandparents used to tell us about how when they were young gas was only $0.25 per gal.. the good old days. The prices are much higher than that now, all because of inflation. 2021 was a record-breaking year in that inflation rose 6.8%, the fastest it has ever grown in the last 40 years. We never know for sure whether inflation will rise or fall, so we generally look back on our past history to deter...