If you want to buy a house but the state of the housing market has so far inspired you to stay where you are, know that the winds are changing and you might want to change your mind along with them. This post will give you some valuable insight into the current housing market and tips to navigate it.
The Not Promising Aspect
Before we jump into the positives, it seems only fair to get the negatives out of the way. Things aren’t getting dramatically better yet. Mortgage rates are still high and don’t show much promise of going down. Inflation also puts a damper on everyone’s plans because they have less money to spend.
The Good News
There is less competition. Because the housing market hasn’t improved dramatically, there are still many people who can’t afford to buy a home. That means the people who can have fewer competitors and getting the home they want is easier. The home will likely be on the market longer and the requirements to qualify for it won’t be as steep.
Home prices are still high, but they are not rising like they were and some homeowners are discovering that they are overestimating how much they can get. In many markets, prices are actually dropping.
There is an extra benefit to prices dropping. It is a good investment to buy a home when mortgage rates are high and the price of housing is decreasing because when the mortgage rates even out or drop, your home value will increase quickly.
Signs You Should Buy Now
You can feel fairly confident in buying a house at this time if you:
- Have job security
- Can afford a 20% downpayment
- Will have a monthly payment less than 30% of your gross income
- Plan to live in that property for 5 years or longer
- Calculate the other, hidden costs of moving
- Compare the ratio of owning a home to renting a home of the same type in the same area and the ratio is less than 16
If you can afford it, you should choose a 15-20 year mortgage rather than a 30-year mortgage. This move can save you hundreds of thousands of dollars in interest costs.
If finding the ratio mentioned above seems too difficult, there are price-to-rent ratio calculators online that will make it easy for you.
You may have decided that renting is better, but you want a brighter prospect for your money. You could invest the money you would spend on your down payment to grow your money while you rent.
Wendy Gimpel Can Help You Make the Best Decision
If you have determined that now is a good time for you to buy, you can begin looking for your new home. Wendy Gimpel is a high-demand real estate agent with a special awareness of what makes a home right for you. Contact her to get started.