Source: The Motley Fool —
After rock-bottom interest rates during the first phase of the COVID-19 pandemic, the mortgage chickens have finally come home to roost. In October 2021, the average U.S. mortgage interest rate for a 30-year fixed-rate mortgage was just 2.99%. As of this writing, it’s 6.66%. Ouch. With an increase like that, combined with the extreme competition in many housing markets, along with a shortage of available homes for all who want to buy them, it’s no wonder that a lot of people are making cash offers on a house. Is it a good idea to forgo taking out a mortgage loan and buying with cash (if you can afford it)? Maybe not.
1. Homes aren’t a liquid asset
While the prevailing wisdom in this country states that homeownership is the only key to wealth (spoiler alert: it’s not the only way), homes aren’t a liquid asset the way money in a savings account or even an investment account are.
