“When we accounted for house price appreciation in that monthly cost of owning, we found that it was more financially prudent to own rather than rent in 48 out of the top 50 markets in the USA,” Kushi added.
While the two outliers were both in extremely expensive markets around Silicon Valley, Kushi explained that Phoenix, Arizona, was the market where it made the most sense to own rather than rent.
House price appreciation means creating wealth overtime
While Kushi accepts a future rise in mortgage rates could cool off some of the demand currently driving the pace of house price appreciation, she also noted that house price appreciation tends to be “downside sticky.”
Sellers, she noted, would often rather withdraw from the market than sell at lower prices in the housing market, keeping supply tight and appreciation up. With rates and housing supply as low as they currently are, we can still count on broadly strong house price appreciation even if rates do tick up.
For mortgage professionals looking to communicate this information to prospective borrowers, Kushi offered a straightforward takeaway: the house is paying you. Borrowers buying in markets experiencing rapid house price appreciation can enjoy measurable growth over time.
