Posted by Dave Van Nus on Thursday, February 29, 2024 at 10:14 AM By Dave Van Nus / February 29, 2024 Comment
Buying a home in Portland is a major investment and achievement, but some buyers are hesitant to make a purchase because they are waiting for lower interest rates. It's true that interest rates today are higher than they were a few years ago (although they are trending in the right direction), but homes for sale in Portland are still a smart investment in spite of the higher rates.
If you are on the fence about buying a home in Portland, consider exploring the benefits of homeownership that outweigh the downsides of borrowing with a higher interest rate. Contact us any time to learn more about finding a home that meets your criteria, or finding a lender who can help you reach your goals.
Keep reading for some key information to consider as you contemplate investing in real estate this year.
Is Portland a smart place to invest?
Portland has consistently demonstrated a robust and resilient real estate market. Even with a slightly higher interest rate, the potential for property appreciation in the long term is a significant factor. Portland's desirability, fueled by its cultural amenities, job opportunities, and natural beauty, has consistently resulted in a steady demand for housing. This demand tends to contribute to property values increasing over time, ultimately mitigating the impact of a higher interest rate.
The demand for housing in Portland has consistently outpaced the supply, leading to a limited housing inventory. This scarcity can work in favor of homeowners, driving property values higher over time. In a market with limited options, individuals who secure a home, even with a higher interest rate, are going to find themselves in a favorable position as demand continues to outstrip supply.
Do the benefits of owning a home outweigh the higher cost?
There are so many benefits to homeownership that it remains one of the best financial choices you can make, even with the interest rate being higher than you had anticipated or wanted.
Owning a home means beginning to build equity that you can leverage toward other goals, or just building your net worth at a slow and steady pace. Homeownership also offers a stability and predictability, especially if you have a fixed rate mortgage. You won't have to worry about increasing rent, having to move when a landlord sells or terminates a lease, or not being in control of the repairs and renovations to your home.
Homeownership in the United States also comes with tax advantages, including deductions for mortgage interest payments and property taxes. While these advantages can vary based on individual financial situations and tax laws, they can help offset the impact of a higher interest rate.
Another benefit of owning a home is the way it offsets the effects of inflation. As inflation increases, the value of your home willappreciate at the same rate (or even faster), while your monthly housing costs remains the same. If you choose a home where you can live for many years, you will likely be able to lock in a housing payment that becomesincreasingly morecomfortable over time as your wages increase.
And remember, although starting with a higher interest rate may not be ideal, you may have the option to refinance your mortgage in the future. If market conditions or personal financial situations improve, refinancing can be a strategic move to secure a lower interest rate,eliminate PMI, and reduce long-term mortgage costs.
How do I know it's a good time to invest in real estate?
While some people are trying to time the real estate market perfectly, you can focus instead on the factors that are within your control. It's true that there may be some times to buy that are slightly more advantageous than others, but buying a home is nearly always going to be a smart investment because it is a real asset that will appreciate over time.
As long as you are not counting on a massive appreciation in an unrealistically short period of time or stretching your budget beyond what is personally comfortable, it's still a great time to invest. Instead of looking so much at market conditions, spend time focusing on your personal readiness to invest.
Talk with a lender about what you can borrow, explore various financing options, and then set a budget that makes sense for you. When you know how much you want to invest, we can begin the journey towards finding a home that is just right for you.
Ready to learn more about buying a house in Portland? Contact us any time.
