- Amanda Ferrari
Is This a Good Year to Purchase a Home?
Updated: Feb 3, 2022
By: Amanda Ferrari
Is 2022 a good year to buy a home in Bend Oregon? Two factors that will influence this are mortgage rates and housing inventory.
Let’s look at mortgage rates. We have already seen recently that they have ticked up above 3 percent. Experts are predicting they will be around 3.6% by the end of this year. So as mortgage rates rise, it will cost more to purchase a home.
Let me show you an illustration of that. To make the numbers simple, let’s say someone has a 1 Million dollar loan. The difference in their monthly payment between a 3% interest rate vs. a 3.6% interest rate is $330 a month!
What would you do with an extra $330 a month?
What I think is really important to note, is that even though interest rates are expected to rise, they will still be historically low. Back in 2018 rates were just under 5 percent and that seemed outrageously low. They have dropped pretty significantly since then. If you know you will be purchasing a home in the next year or two, NOW may be the best time to save on interest rates.
Mortgage rates aren’t the only thing on the rise for next year; home prices are forecasted to appreciate. Why did we see such great appreciation in 2021? Inventory. Simply supply and demand. There were more people wanting to purchase a home than homes available for sale.
The national housing forecast is showing continued appreciation but at a slower or more moderate rate. Closer to a 5% increase, not the 20% increase we saw in Bend last year. This is also called deceleration. Experts are definitely not projecting a decline in prices but a slower rate of appreciation.
Appreciation will continue because inventory is still a big challenge. Balancing out supply and demand will not happen overnight. There are still a lot of people wanting to purchase a home in beautiful Bend Oregon. Now that people can work remotely, I think we will continue to see the trend of people moving here.
It’s also worth mentioning that there are non-financial benefits of moving to a new home. In these past couple of years with the pandemic our lifestyles have evolved quite drastically. If you are needing a change to accommodate to your family's needs or new lifestyle then this might be the very best time to make that move. Financial and non-financial benefits are a key component to the value of homeownership.