Interest rates continue trending sideways while we’re literally chilling here in the last week of 2023.

Fannie Mae published their 2023 Home Price Appreciation at 5.9%.  This number will be revised several times over the next few months. Fannie forecasts home prices to increase by an average of 2.4% over the next 12 months, and 25% over the next five years.  With an average sales price of $488,900 last month, today’s buyers will see $122,225 in appreciation over the next 60 months, which comes out to $2037.08 in monthly gains!

With a 3.5% down payment on a super liberal first time homebuyer program using the rates below, that payment including taxes and insurance is $3,283.18.  Add back in monthly appreciation and the net housing cost is $1,246.09 per month on that $488,900 home.  And if you factor in the 13.3% average tax bracket on the $74,580 average household income, that gives you an after-tax-savings payment of only $952.20.

Where in the world are you going to find an “average” rental for $952/month?  When you see articles claiming that renting is cheaper and that there’s never been a worse time to buy a home than now (in the Wall Street Journal of all places!), for everyone’s sake, don’t believe it!