The average homeowner stays in their home anywhere from 7 to 13 years. In San Francisco, the average price of a house has only increased in this time. Take a look at the graph below.
The average price of a home in San Francisco nearly doubled in 13 years. Home ownership in any market can be a sound investment when it comes to thinking about it as a long term plan.
5 Reasons why home ownership is a good financial investment:
- In the long term, home prices appreciate over time.
- You can leverage the return of your cash down payment if values increase.
- If you opt for a fixed interest rate mortgage, your housing costs remain fixed during the length of your loan. Your rental housing costs can change by a yearly percentage increase as decided by the landlord.
- When you pay your monthly mortgage, you are paying back what you borrowed from the bank, where as rents are spent and gone.
- If you decided to move elsewhere, you can turn your home into a rental property.
FOMO home ownership or FOMO interest rates?
Last year’s market was the perfect storm for real estate – but not necessarily an easy market for homebuyers. Although rates were the lowest in decades, competition was extremely high. Some buyers succeeded, but many buyers were also discouraged. Buyers, if you were looking for opportunities in a more balanced market, now is the time.
Today’s market is different: Rates are averaging higher than last year but home price averages are trending downward as the seasons change. Don’t let the current rates discourage you from pursuing your investment goals - the option to refinance your house payment and terms will come when rates come down.
As of now, inventory levels are higher than last year with less competition and more price reductions. Open house activity has picked up and it’s a good time for home shopping - there are more options out there and far less buyers than in 2021.
Pro tip:
In this market, it is wise to shop around for the best rates. According to Freddie Mac, borrowers can save $1,500-$3,000 by getting between two and five quotes from different banks. Contact me for my preferred lenders.
