I’ve always been all-in on homeownership. Yet, for the first time in two decades since the beginning of the pandemic, I haven’t owned a home.

All of which got me thinking: The National Association of Realtors (NAR) just issued a report calculating that the cost of purchasing a house in the U.S. has increased 55% year over year since 2021 after factoring in home value appreciation, tax re-assessments, and mortgage rate increases.

So, from a seller’s standpoint did I just miss out on the frothiest bull housing market in decades?

The pandemically-fueled housing boom since 2020 as a function of appreciation over time is unprecedented against any other historical financial metric, including the recent Dow Jones, NASDAQ, and S&P run ups.

That percentage gain also translates directly into higher appraised home values, which means more equity in sellers’ pockets when they decide it’s time to move. Ergo in sum, homeowners have seen a better return on their real estate investments over a shorter period of time since 2020 than even the pre-Great Recession housing bubble.

The good news for people like me who’ve either rented by choice, been priced out of the current market by the math, or sat on the real estate sidelines for other personal reasons over the past two years, however, is that now is still a great time to buy a home for several reasons under the right circumstances.

First and foremost, the COVID housing froth finally is cooling off.

Listings are up along with new housing starts, closings are down, and the days of all cash, waive-all-contingencies bidding wars are waning. So, excluding places like San Francisco or Manhattan where home prices had reached the point of almost stupid years ago, buyers in most markets already are on the back side of the pandemic peak.

“The overheated market of 2021 is already transitioning toward a less frantic landscape in response to several factors, and housing’s fundamentals are already shifting from the early days of the pandemic,” says George Ratiu, Manager of Economic Research at Realtor.com. “Builders have ramped up the pace of construction and more new homes are hitting the market. In addition, many homeowners who delayed their plans during the pandemic are ready to move forward with their lives so we’re already seeing an increase in the number of new listings—a sign of improving supply in existing homes. This boost in inventory, coupled with higher mortgage rates, inevitably is going to put downward pressure on the frenetic price growth we have experienced over the past year. That’s good news for buyers who have time on their side since the real estate landscape over the next 8-12 months is likely to shift away from a seller’s only market.”

Many would-be home buyers, especially Millennials without kids, also have been stashing cash in lieu of eating out and taking vacations since the beginning of the pandemic, resulting in a COVID-induced nest egg alternatively deployable for down payments, closing costs, moving, and renovations—which often are the primary financial impediments to purchasing a home in the first place.

Perhaps most importantly, almost every expert I’ve spoken with agrees that the current housing boom isn’t a “bubble” a la 2007. Housing’s core fundamentals are strong—meaning the basics of supply and demand as well as the mortgages and household balance sheets upon which those foundations are based aren’t about to shatter from a glass house rock out of nowhere any time soon.

Prices Aren’t Going Down

No matter who you talk to, it’s widely agreed that U.S. home values across the board aren’t dropping any time soon. This is due primarily to a single-family housing supply crisis and demographic shifts that have been building for years. So even while homes prices might seem inflated right now by the numbers, they aren’t artificially elevated like they were back in in 2005.

“A couple of factors are likely to keep pressure on prices for the foreseeable future,” says Realtor.com’s Ratiu. “The first one is demographics. Millennials are the largest cohort in the U.S., are embracing homeownership, and eager to use real estate as a foundation for financial and economic growth. With over 4.5 million Millennials turning 30 over the next few years, housing demand will remain robust. At the same time, we started 2022 in the wake of over a decade of under-building. Based on Realtor.com’s calculations, we are short 5.8 million new single-family homes across the country which will sustain demand and prices.”

Mortgage Rates

In 1981, interest rate hikes by the Federal Reserve to put the breaks on inflation pushed 30-year fixed mortgage rates to an all-time high of 18.63%. So, despite the Federal Reserve’s recent monetary tightening and interest rate increases (the current 30-year mortgage rate according to Bankrate is 5.46%)—and the possibility of subsequent ones to come later this year—mortgage interest rates overall remain historically low.

Taxes

For first time homebuyers who’ve been renting for years, homeownership comes with a ton of perks.

Depending on the price of your home and the size of your mortgage, these aren’t small numbers, especially as interest rates rise. Some years in some houses, particularly in 2005 when I bought a home at an 8%+ rate, my mortgage interest deduction was well into the $20,000 range—which for a writer is no small nut to be able to write down off of my total earned income (in some years the mortgage interest deduction alone brought me down into an entirely different tax bracket).

In addition, after two years the profits from selling your house assuming it’s your primary residence aren’t taxed by capital gains which means more net money into your pocket after closing costs.

Rents Are Increasing Too

The pandemically-fueled home price increases in the U.S. over the past two years have been widely reported in the media, yet far less covered has been the fact that residential rents have been rising too. Rents in Boise, ID, for example, have increased over 13% since the beginning of the pandemic, almost double that of inflation as a whole. In Miami according to some estimates they’re up over 31%.

So for home buyers weighing the opportunity costs of continuing to rent and throwing their money away versus getting into the homeownership game and building long-term wealth, the logic isn’t as clear as it’s been in the past when rents typically have dropped asymmetrically relative to home price increases in a similar fashion to investors fleeing stock markets in favor of government backed bonds.

Wealth Building

No matter how you slice the numbers, long-term homeownership is still one of the most predictable, risk-manageable wealth building strategies compared with other ways of deploying one’s income for a return on investment. So compared with renting, even at today’s 5.46% mortgage rates, building equity in a house instead of renting is still a hard logic to argue with—especially if home prices remain strong.

What all of this means for the U.S. housing market writ large is good news, says Craig Studnicky, founder of Miami-based real estate brokerage RelatedISG.