It’s been two years since the pandemic sparked a housing boom that took average home prices in the U.S. to all-time highs and buyers are still feeling uncertain. The median house price in Portland is currently at $539,000 and will probably continue to rise. 2021 was a year of high prices and low mortgage rates and many of our clients are wondering whether 2022 is still a good year to buy a house. Meanwhile, many others question if it would be best to just continue renting. The answer to that question will always depend on very personal circumstances, but let’s take a look at some advantages and disadvantages of buying vs. renting in this market.
Homeownership may seem further and further out of reach for many with rising prices but remember that rent prices are not expected to go down. While many people were able to get good deals as renting prices dropped in the early days of the pandemic, prices have now bounced back and continue to escalate. If you want to buy, higher rent prices may start depleting your savings as renting inventory is depleted from potential home buyers deciding to rent because of rising interest rates. These are not potential home buyers who decided not to buy, they are usually priced-out of the market. If you can get pre-approved for a home loan, you are not in this category. If you need an amazing lender to answer all your questions about home loans, please message us!
Deciding to rent may be tied to your lifestyle and where you are in your life. If you can’t make the commitment to live in one place for at least 3 to 5 years, which is the time it will take for a home in this market to increase in value enough to make it worth it, you should probably continue renting. Also, you will save in maintenance costs, and you won’t have to worry about property taxes.
So the answer is... if you are at a place in your life where you can:
Afford a down payment of at least 3.5% (No downpayment needed if you are a Veteran).
Get pre-approved for a home loan (been at your job for 2 months and have a credit score about 620).
Reasonably expect to spend the next 3 years in the same city,
Budget for closing, inspection, and maintenance costs (generally about $7,000)
Then yes, this is the time to buy! We understand rising prices are a concern for buyers, but remember that interest rates will continue to increase throughout the year, and therefore so will mortgage rates. With that in mind, anytime before they continue to rise will be a good time.
So you know you want to be a homeowner and you understand that homes in the Portland Metro Area aren't going to get any cheaper (check out the graph above if you still think they might). This is where we come in. If you’re ready to enter this competitive market but are a little unsure about what to expect or which steps to take, we’re happy to answer any questions you may have and prepare you to make a winning bid on your dream home. We've help many people just like you successfully become a happy homeowner! Many of them have started by taking our Home Buying Class. You can sign up here.
If you have general questions you can send them to Hello@TimberandRose.com.