We witnessed an unprecedented real estate market environment in the past two years. Historically low interest rates, drove many contemplating buyers to make their final move towards home purchase. Unfortunately, in most large metropolitan markets, the demand significantly surpassed the supply. The result was bidding wars that drove home prices to extreme heights.
In the second quarter of 2022 we witnessed a rapid increase in interest rates. This, in combination with the growing inflation, pushed many eager buyers to postpone their home buying dreams. The retreating buyers went back to searching for rentals, which in its turn, drove rent prices up. In some areas, such as Northern Virginia, rents increased by up to 37%.
As a Realtor and a member of Dulles Area Association of Realtors, I constantly strive to educate my clients on all aspects of their real estate endeavors. When it comes to home buyers, my motto is “It pays to own a home”. When the interest rates hit 6%, my buyers decided to rent. I asked every single one of them, “How much interest are you paying when you rent?” Most said it was “zero”. My response was, “100%! Your interest is 100%”. When one is paying rent, they are contributing zero funds towards building their own equity. Even at a higher interest rate, mortgage paying homeowners do not lose money when paying their monthly mortgage payments.
Based on the market analysis for the month of August 2022 by Northern Virginia Association of Realtors, home values in the area increased by 3.2%. Despite the fact that average days on the market went up by 5.6%, and there were 25% less homes sold, the overall value of properties still continued to rise.
If you have at least 3% down payment ready to go, it is never a bad idea to purchase a home.
Renting is 100% interest. Remember that when you decide to once again renew your lease!
Alina Baymetova (Realtor)
EXP Realty
Call or text: 571-397-7662