Keith’s Musings Vol. 8: Virtual Hugs

Yesterday the stock market took some body shots (technical term I learned in business school) and was down over 1,300 points (though it is bouncing off the bottom this morning) the reason was this: inflation. We thought the inflation genie was getting put back in the bottle but the number missed. And missed pretty bad. A big part of why was: rent. 

This makes me think of, feel for and have empathy for the first-time homebuyer. I really feel for first time home buyers in this market. They have also been hit with a few punches over the last three years. 

The first punch was the massive rate of appreciation in housing across the country over the last 36 months made them feel like they are missing the boat and it could be slipping past them as they watched prices rise. 

The follow up punch was a pretty unprecedented rate shift. Interest rates for mortgages have spiked. A lot. And really really fast. So while the market has been slowing down in appreciation (and even correcting in some markets) it didn’t feel cheaper because rates were way up. 

Now the most recent punch to the first-time homebuyer: rents are spiking. So even the choice of sitting on the sideline is costing them more. Like can the first timer catch a break? Prices went up up and away. Rates made that pace of change look slow and now it cost more for their apartment they are renting. Bleh. 

Buying a home anytime is a deeply personal decision, even more so for the first time. I would never presume to tell someone what to do. Even less so based on market conditions since I think people buy more because of timing in their life than timing in the market. And one of the things to factor into that decision making process is the cost of renting. I don’t see this trend tapering off soon. I think rents will continue to rise.

If you’re a first-time home buyer reading this I want to tell you that we, as an industry, feel for you. There isn’t much that is more rewarding for people in the industry than helping someone get their first home. It’s so powerful and emotional to help people hit that milestone in their life. I’m not sure if a virtual hug will help but we’re here to give them to you.

Keith