Money Matters Expert Advice on VA Lending & Personal Finance By Phil Jawny, MIRM, CMP, CSP
Now or Later: Determining the Right Time to Buy Question: The housing market seems so crazy, is now the right time to buy or should I wait until later in 2022? Answer: This is a great question and while the answer varies somewhat depending on your personal financial picture, there are three important things to consider when you make the decision for your family. #1 Mortgage Rates: What are mortgage rates and where are they projected to go in the new year? In January 2021 the average 30-year fixed mortgage rate in the United States was 2.65%, making it the lowest rate in 50 years. As you might expect, it can’t stay that way. Analysts from both Freddie Mac and the Mortgage Bankers Association expect home loan interest rates to go up in 2022. The MBA’s quarterly mortgage rate forecast projects the following increases: • Q4, 2021 — 3.7% • Q1, 2022 — 3.9% • Q2, 2022 — 4.1% • Q3, 2022 — 4.3% • Q4, 2022 — 4.4% While these are only projections, analysts agree an increase is on the way. For consumers, these seemingly small percentage increases equate to an increase in monthly mortgage payments, depending on the price of the home. The good news is, compared to mortgage trends over the last decade, these are still historically low rates even as they increase in 2022. The rates you see right now won’t last; they will stay low but remember — as they rise so does your mortgage payment.
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WWW.SanDiegoVeteransMagazine.com / NOVEMBER 2021
#2 Home Values: Will the price of homes rise? Will it be more advantageous to rent or own? While rates have dropped, home sales have soared and so have home values. The raging housing market may make some potential buyers shy away from entering the ring in hopes that the market will cool off and create more favorable buying conditions. It’s understandable to be cautious and a real estate agent who specializes in supporting military families can help simplify the process if you do decide to consider it. But because it’s still a seller’s market, it’s unreasonable to expect competition to decrease and home prices to dip. According to CoreLogic, real estate will still appreciate at a faster-than-average rate through late 2021. Home prices nationwide from 2020 to 2021 increased by 18.1%, marking the largest annual gain in home prices in 45 years. A recent report from Zillow suggests more of the same, with home values projected to climb by double digits by summer 2022. That presents an opportunity for homebuyers to benefit from this surge and gain value from their investment faster when combined with low interest rates if they can make a move sooner rather than later.
