Thursday Thoughts

Is it still worth buying a home in 2022?

Dana Anghel By January 25th, 2024 January 25th, 2024 No Comments

Once upon a time, there were two friends that lived in Utah. 

They went to the same high school, had similar jobs, made similar incomes.  They chose different paths when it comes to homeownership, and here is how their lives unfolded.


During the housing boom, one opted for the “freedom” of renting. We’ll call him The Renter

The other bought a house, lived in it for a while, then sold it for a good profit. It worked so well, that despite his better judgement, he overextended and bought an even bigger, nicer house. We’ll call him The Homeowner, although we’ll see he doesn’t always own a home throughout the story.

In the market crash of 2008, the two friends had fairly different experiences.

The Renter was somewhat happy to take advantage of the very abundant cheap rent opportunities that followed. The Homeowner was on what felt like the top of the world, then it all came crashing down. Like so many people at that time, he lost his home to foreclosure.

The Renter learned that taking risks is stupid – such bravery can be severely punished.

The Homeowner learned that had he not overextended, much of the trouble he got himself into could have been prevented. He learned to rebuild his credit, and to have a better overview of his finances. He also learned that foreclosure wasn’t the end, but a chance at a new beginning. 

2008 – 2011

Trust in real estate is at its lowest levels, and the market is flooded with foreclosures and cheap rentals. The Homeowner struggles to rebuild credit, while The Renter lives in a beautiful big home, paying someone else’s mortgage.

Few can or would buy a home at this time due to severely tightened mortgage guidelines. In retrospect, this is the best time to invest in real estate, as home prices would start to soar in the years to come.

2013 – 2016

Mortgage rates are low curtesy of the Federal Reserve propping up the economy, and the real estate market is picking up. People are buying again, and the unemployment numbers are coming back down.

The Homeowner applies and finally gets approved for a mortgage loan. He buys a home that needs a little bit of work, but that is within his budget.

The Renter is thinking about it, but it still feels risky. He doesn’t want to be tied down. There are so many rentals to choose from, and some of them are nicer than these homes that are on the market. Why go through the hassle? Plus, there’s talk about an upcoming market crash. It’s a cycle that happens every 7 years or so. It never fails “the experts say”. He’ll look into it later, but he’s saving up his money just in case.


The real estate market is thriving. Bid wars and escalation clauses are now a thing – it’s a great time to be a seller! Many first time homebuyers are purchasing homes after seeing their families and friends become homeowners. 

End of 2019, The Renter finds himself persuaded to get on board, and gets pre-qualified for a home purchase. He worked hard over the past years to save about $40,000, and it’s the most money he’s ever had. He starts the home search off by being picky. He manages to get one home under contract, but decides to back out after the home inspection. The seller is open to negotiating repairs, but the home just doesn’t feel right, it’s just not “The One”. He’ll take his time, there’s no rush.

The Homeowner is proudly watching his home value go up. He’s made some renovations in the past few years, but the market appreciation is really where it’s at. He’s glad he purchased when he did, but also realizes his growing family needs a new home. Mortgage rates are so low, so he does a cash-out refinance. He moves $150,000 worth of equity into his savings account. If the right home comes up for sale, he wants to be ready. He already worked the numbers: if he rents out his current home, the rent payment will cover the mortgage and bring in a small profit each month.

2020 – early 2022

The pandemic hits, and there is a lot of uncertainty and fear. Some buyers decide to hold off on purchasing. Others see opportunity and jump on it – it’s so much easier to get under contract when you’re not up against 10 other offers!

After the initial confusion, and fueled by dropping interest rates, the real estate market is ON FIRE.

Other states are shutting down and enforcing all sorts of restrictions, but Utah stays mostly open. Businesses start allowing people to work remotely, so many are relocating to Utah from various parts of the country. Apartment dwellers are now desperately looking for homes with a backyard.

Things get really crazy. Home values soar, and there’s about 30 offers per property within 48h of the listing going live. Buyers are literally paying anywhere from $10,000 to $50,000 over appraisal value to win contracts.

The Renter’s mind is blown. He misses out on home, after home, after home. With property prices on the rise, he doesn’t have a whole lot of wiggle room to pay over appraisal value. After the minimum required down payment and closing costs, he maybe has up to $10,000 to offer over appraisal, but that would leave him without an emergency fund. “This can’t possibly go on, it’s not sustainable” he tells himself. Despite his agent’s advice, he decides to press pause again on the home search and wait things out. He signs a new lease with his landlord to cement his decision.

The Homeowner is also house hunting. He too misses out on a couple of homes, but figures out quickly that he needs to get aggressive. Thanks to his advanced planning, he has the funds to do so. Third time is a charm, and he wins the bid on a great home for only $30,000 over. He’s planning on keeping this home for a long time, so it’s a no brainer. If home values keep going up, his new home will be worth what he paid for in less than 6 months. If they don’t, he can wait it out, there’s no rush.

Present time

The Renter’s lease is coming up. The home he’s renting got sold to an investor, and the new landlord will be raising the rent by $400/mo. He doesn’t see the rent increase as reasonable despite the rising home values, so he resumes his home search. To his surprise, mortgage interest rates are now almost 2% higher than they were a few months ago. He can still qualify, but he’s almost priced out of the market. His new projected mortgage payment is almost $500 more expensive than it was a year ago. He’s angry and defeated. $40,000 is not what it used to be, and inflation is chipping away at his savings. 

As his lease is about to expire, he’s struggling to find a new place to rent at a decent price. Then a strike of good luck – his old high school buddy, The Homeowner, shares a post on Facebook about looking for new renters for his investment property. Last he talked to the guy, he was moving into his parents basement after losing his home to foreclosure. Time to catch up, and hopefully snatch up that rental.

It’s a little smaller than he’d like, and the cost is still higher than he thinks it should be. But he’s hoping the market will crash soon, and when it does.. He’ll be ready!


True opportunity often time comes before you think you’re ready, and it’s not always the obvious choice.

While the story I told you is a hypothetical situation, it’s “made up” by piecing together various scenarios I’ve witnessed over the years while doing mortgage loans. 

The best time to buy a home was when rents were cheap and purchasing a property meant paying a little extra for a home that wasn’t as fancy. Second best was when the market was just starting to pick up, but buyers still had negotiation power. (Ah, the good ol’ times when an appraisal would come in low, and the seller would lower the purchase price..)

Being a homeowner right now is amazing regardless of how much you paid it. You’re likely on a low 30 year fixed mortgage payment that’s not going to change, outside of property tax and homeowner’s insurance premium increases.

No one can tell you with 100% precision what’s going to happen to our real estate market, or our economy. There will always be some risk involved, but you can manage it by doing your research.

Two important indicators to look at are inventory (number of active listings) and unemployment numbers.

Low inventory + low unemployment (2% In Utah right now) = strong real estate market. While inventory has gone up in Utah in the recent months, we’re still not where we need to be in terms of a balanced market between buyers and sellers. Housing shortage is still a thing, and the population is still increasing at a fast pace.

High inventory + high unemployment (5.2% in Utah in 2008) = the 2008 market crash.

You can’t control inventory, or unemployment numbers.

Availability of credit is another thing to factor in, but as someone who does mortgage loans for a living, I can attest to the fact that only those qualified will get approved to purchase. It’s a night/day difference from how the industry operated back in 2008.

What you can control is your budget and your options once you have actual numbers. Do you know how much you qualify for, or what a projected monthly mortgage payment looks like at the current interest rates? If not, what are you waiting for?

I get that you’d want to make a good investment, but you are not an investor. Do you plan on flipping this property for a quick profit, or do you want a stable housing payment for a few years? Equity would be nice of course, but even if you just avoid the inevitable rent increases, you’re already ahead of the game.

According to this article, there’s always living in an RV when rising housing costs become unaffordable.

If you’d rather not live in an RV full time.. Email me for a no obligation/no credit pull quote at [email protected] or Apply Now to get Pre-Qualified for a home purchase.