Is the Missoula real estate market and rising interest rates making you stay in your rental?
We all know that the Missoula, Montana real estate market is anything but steller at this moment and the rising interest rates have many people double thinking about trying to buy a home. With that said, I still believe it is a good time to buy in this market, let me explain why.
With interest rates going from the high 2% to mid 5% it is going to raise your monthly payment a few hundred dollars, but, what if your rent goes up a few hundred dollars… 2022 is a tax reassessment year, and what that means is that more than likely the Missoula property taxes will be going up. What does that mean to you as a renter? In most cases, the property owners will pass the property tax to the tenants of the property they are renting. If that happens, the renters will have no choice but to pay the higher rent or look for a cheaper place to live. So in the end, you will be paying more per month.
Monthly investment V’s Monthly rent
Think about this, when you pay rent, you are virtually paying 100% interest. All that money is going out of your pocket and into someone else’s pocket. Every month you are starting at zero! When you purchase a home, you are investing in your future. Not only is your home appreciating in value every month, but you are also paying down the principal of your mortgage. In the last couple of years, homes in the Missoula real estate market have appreciated 25-27%. That is not typical for this market but it is happening. Typical appreciation is 5-8% in a normal market. So, if you are nervous that the interest rates have gone up 2% in the last few months, you would still be gaining 5-10% per year.
If you have any questions or would like to schedule a meeting to discuss all the available options, please feel free to contact me at (406)926-6767