The national real estate market has rebounded significantly since the "Great Recession", and as a result, home values in Richmond, Virginia have increased nearly to post recession highs. The reasons for the continued recovery are as follows...
- Solid Economic Growth
- A healthy Labor market
- A large milennial population
In addition, there are a number of factors that could create a significant slow down in the postive equity trend that we have experienced in Richmond, Virginia.
- Rising Mortgage Interest Rates
- Unforseen economic circumstances
- Rising National Debt
The fact remains that year-over-year home prices have increased in both the luxury, or high end markets, as well as the lower price range, or first time home buyer markets. The actual numbers in Richmond, Virginia show a year-over-year % change in price of +2.5%. The average year-over-yeaer equity gained per houshould is $6,000 according to core logic. In fact, according to Daren Blomquist from Attomdata, "the number of equity rich homeowners is more than twice the number of seriously underwater homeowners." While it is safe to say that we have recovered from the devestating impact of the recession, we should still pay attention to the fact that mortgage interest rates are rising, and as a result, consumers have ...
In Richmond, buying a home is still cheaper than renting one.
One of the main reasons is because of these historically low interest rates that we have been experiencing for the last eight years or so. Nationally speaking, buying is actually 36% cheaper than renting.
From a national perspective, interest rates would need to rise to 10.6% for renting to actually be cheaper than buying a home. We haven't seen interest rates that low since 1989, so the odds of interest rates going back to that level anytime soon are highly unlikely.
If you're on the fence about buying a home, it makes a lot of sense to make a move now.
According to the National Association of Realtors, the average family's home is $225,000 if they own a home versus only $5,000 if they don't own a home. Now, some people are at a stage in life where they're not ready to own a home and renting is a better option, and I understand that. However, if you are in a position to own a home, the numbers are clearly in your favor.
While interest rates are this low, you can benefit by owning a home not only to build your net worth but also simply for the fact that it's cheaper than renting. Why pay off someone else's mortgage when you could pay off your own?
If you're thinking about buying a home or you have questions about the Richmond real estate market, give me a call. I'd be happy to help.