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ndustry experts weigh in on the rapidly changing real estate market, citing factors such as soaring mortgage interest rates, shifting population growth, and inventory levels. Ron Minegar, Alissa Gamble, and Chad Hansen, a trio of veteran agents with over eight decades of combined experience, share their insights.
Homeownership is not for everyone, they agree. "It's different for everybody," says Minegar. Hansen notes that the traditional way to build wealth through homeownership may no longer be viable for some, citing the impact of COVID-19 on remote work and changing lifestyles. Gamble emphasizes that real estate can be a vehicle for wealth creation, but it's not suitable for everyone.
When it comes to deciphering median home prices, Minegar warns against relying solely on numbers, while Hansen relies on data from the Boise Regional Realtors. Gamble views herself as a consultant who asks questions and shares data to help clients make informed decisions in a constantly shifting market.
The experts also discuss the impact of rising mortgage interest rates on affordability and homeownership. Minegar suggests that 35% is a comfortable debt-to-income ratio, while Hansen believes 30% or less is more reasonable. Gamble notes that nationally, 34% is the average mortgage payment as a percentage of income.
The "locked-in effect," where empty-nesters with low-interest mortgages and significant equity are hesitant to sell, is also a concern. Minegar attributes this trend to people being happy in their current homes or moving for family reasons. Hansen notes that this phenomenon significantly impacts the market, while Gamble highlights the growing number of homeowners with substantial equity.
Financial literacy is crucial in today's economy, according to the experts. Minegar emphasizes the importance of understanding financial responsibilities and avoiding debt traps. Hansen notes that many young people lack financial literacy, making it challenging for them to obtain loans or maintain homes. Gamble suggests that schools could do more to teach financial literacy, including planning for maintenance costs and responsible spending habits.
