Homeownership Month: Can You Still Afford the American Dream?
Real Estate
Real Estate
Happy National Homeownership Month! Owning a home has been a part of the American Dream for decades—but can people here in Atlanta afford it? These days, buyers are apprehensive about the price tag of homes and some are wondering if it's worth it.
Long story short? The pros far outweigh the cons.
So, let’s break down the key components of home affordability and why investing in Atlanta real estate is still the best strategic move.
Many people in today’s market are discussing the trials of home affordability. But what are the key components that have affected today’s buyer pool? Here are the three main contributors:
One of the greatest factors affecting home affordability is today’s mortgage rates. We know this has been a sore subject for some time, but rates are a crucial element that affects a buyer’s mortgage payment. When mortgage rates are low, it becomes easier for potential homebuyers to afford the homes they desire. This is because lower mortgage rates result in reduced monthly mortgage payments, making homeownership more accessible and financially feasible for many individuals and families.
The next greatest factor is home prices, which can be directly linked to housing inventory. When there's a limited supply of homes on the market and high demand from buyers, home prices tend to rise. After going up at a relatively normal pace in 2023, they’re expected to continue rising moderately through the rest of the year. That’s because even with inventory projected to grow slightly this year, there still aren’t enough homes for sale for all the people who want to buy them.
And the final main ingredient for real estate affordability? The state of the job market. It can be difficult to afford a home when wages and employment opportunities are low. Higher wages allow potential homebuyers to qualify for larger mortgages and afford homes at higher price points. However, economic downturns or stagnant wage growth can limit affordability, particularly in areas with high costs of living, making it more challenging for individuals and families to purchase homes that meet their needs.
Despite the ebb and flow of home affordability, there’s a reason why owning a home is considered part of the “American Dream.” Not only do you have the benefit of owning your own slice of heaven, but there are plenty of other reasons to purchase a home:
Owning a home is widely regarded as a great investment, serving as a hedge against inflation compared to other types of investments. Unlike assets that may depreciate over time—such as vehicles or certain financial instruments—real estate does the opposite and can appreciate in value over the long term. Additionally, real estate investments often offer tax advantages and potential rental income.
Homeownership is a great way to build your personal net worth. As homeowners pay down their mortgage and property values appreciate their equity in the home increases and will lead to a higher net worth. The best part? This equity can be leveraged for various financial purposes such as funding education, starting a business, or saving for retirement.
Something else many homeowners consider is contributing to their generational wealth. By owning a home and steadily building equity over time, homeowners can pass down valuable assets to future generations. This legacy not only provides financial stability and security for your future family, but also serves as a way to provide for your loved ones long after you’re gone.
How can you build generational wealth through homeownership? It's important to maintain the property, make strategic home improvements that increase its value, and establish a financial plan to preserve and grow the asset's value over time.
Even if you’re questioning Atlanta’s affordability, don’t forget about the reasons why you want to become a homeowner in the first place. The emotional side of owning a home can be just as important as the facts and figures!
Do you have questions about the state of the market? Maybe you don’t know how much home you can afford? Reach out to the LaMon Team to learn more about the home-buying process. We’re here to answer any of your questions and guide you toward the American Dream!
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.
