Last month, Jason Barlow of Arbor Financial Group sent an interesting newsletter about the rising costs of utilities and rent and how all of that affects home values. I wanted to share some of that information with you here (and add my own takes).
Right now, rent and utilities are outpacing home values for the first time in a decade. Last year, rent increased 3.8% while home values only grew 1.8%. Nearly half of renters are spending 30% or more on their income on housing. And minority households are facing the highest burden, with Black renters at 56%.
Those figures are certainly something to keep in mind if you’re deciding between buying and renting. Here is an article from The Washington Post that lays out all this information in more detail. As a realtor, I find incredible value in homeownership (if only as a form of long-term investment that can create generational wealth for your family). But I understand the markets and economy fluctuate, taking these rent and utility costs with them.
Kristin’s take: Right now, if you have been on the fence in buying a home or an investment home, I think is a great time to get into the housing market. We still have low inventory, however we have seen price reductions. In this graph many of the lenders are anticipating rates to fall next year (see graph above). Get in now, before everybody gets into the market – marry the house, date the rate – then refi when rates start to go down. You most likely will get a lower price now than when rates go down.