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MSU economics professor offers advice to first-time homebuyers

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Posted at 10:16 AM, Apr 08, 2022
and last updated 2022-04-08 12:16:37-04

BOZEMAN — Those looking at buying a home in the Gallatin Valley are still feeling the pressure of a median sticker price around $896,000, according to the Gallatin Association of Realtors.

What may be good news for current homeowners, seeing their land valued more, could be cause for concern for renters and first-time home buyers, according to Montana State Professor of Economics Carly Urban. Urban notes that the volatility in the market will likely temper down as interest rates rise.

“That’s about $500 a month more in a mortgage payment—and that’s just from the interest rate increase,” Urban said.

Ed Tompkins, a local Certified Financial Planner, also points out that the inflation rate is 7.5%, and interest rates may continue to rise.

Raising interest rates is one way, the other being increasing the number of homes, to cool off the housing market, Urban said.

“How far ahead should you be looking? These people that are thinking about homeownership, real estate—wait until you know you’re going to live somewhere for three or four years,” Urban recommends. “Build your career and then think about those next steps.”

Along with having a steady career, before jumping into the market, look at paying down debt, getting accounts and finances in order, and having an emergency savings account, Urban said.