How Affordability Is Affected by Increased Prices

Salt Lake City Real Estate Podcast with Justin Udy

What do our current increased prices mean to you? If you are an owner, it means that you have more money without even doing anything.

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Today I want to talk to you about how the increase in pricing, interest rates, and affordability can affect you and your home. Many people have been asking about what the market is going to do and where are we going. Here are the facts. The market is growing. The prices are rising. And, interest rates are going up. These factors create an issue where someone that could previously afford a home for $1500/mo. is now looking at paying $1,700 to $1,800 per month. This is not just because the rates went up but also because the value of the home increased. People are running into the issue of how it affects them and their homes. Compared to last year, we are finding a couple of differences. One is that we have even fewer homes on the market, but we have more sales occurring in the market. This creates a supply and demand issue which pushes up prices.

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Increased prices affect your home personally because your home is now growing in equity.

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This affects your home personally because your home is now growing in equity. With that new equity, you can take it and sell your home, and buy a larger home. Also, if you are planning on upsizing, you have the amount you have paid off for your current mortgage which you can transfer to a new property. Or, you can use that new equity to get a home equity line of credit for updates. If you have the cash, I do suggest you use it. However, using this will allow you to make your home a better place for you and your family. Finally, you can keep the equity where it is and continue to own this same property. You can either continue to live there yourself, or you could also turn it into an investment property. If you can make it an investment property with a higher lease than your mortgage payment, this will create an amazing source of income. It also creates a part of a portfolio for future growth. So, just consider that when there are changes in the market and issues with affordability, it unfortunately creates a situation where some people who want to buy are pushed out of the market. They instead continue to rent. While the real estate market does go up and down over time, rents will continue to increase. Hopefully you can consider this as an opportunity to get in our growing market. In the event that it does slow, you wouldn't have an issue like you would with renting because you will already be locked in with a great rate. If you have any further questions or would like to speak to me about buying or selling, please feel free to contact me by phone or email. I look forward to speaking with you soon.