04/07/2022
I don't often post much about home finance, but recently I've been getting more and more questions about rates, housing affordability, timing for buying and refinance. So here's my take:
Comparing the payments of both loans, the difference of $298 is a 28% increase from last year. But you cannot just look at the payment on it’s own – Incomes have increased by 6% since last year…but that’s all wage growth. Private sector wages have gone up by almost 10%, which is likely more indicative of the people actually buying homes. But using 6%, and factoring in the increase in monthly payment, the change in P&I ratio is only 3%.
The payment has increased and affordability has gone down slightly, but the impact on your ability to purchase is much less than the media headlines would lead you to believe.
Prices are unlikely to go down and it still
may be quite a while before we see anything close to equilibrium. Most current homeowners have refinanced and locked in rates in the 2’s and 3’s they are not selling. Investor concentration continues to rise as rents continue to increase making both short term and long term rental properties attractive to investors (this is likely the main reason our inventory is so low).
If you’re still thinking of fixing up your place and need to tap into your home’s equity, do so sooner than later as rates are till historically low. The real people being squeezed are first time homebuyers.
Now let’s get back to Rock’N’Roll and hockey 🤣
