If you are debating purchasing a home right now, you are surely getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in real estate.
Let’s look at whether or not now is actually a good time for you to buy a home.
There are 3 questions you should ask before purchasing in today’s market:
1. Why am I buying a home in the first place?
This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances.
A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money:
- A good place to raise children and for them to get a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
What non-financial benefits will you and your family derive from owning a home?
The answer to that question should be the biggest reason you decide to purchase or not.
2. Where are home values headed?
When looking at housing values, Path & Post publishes weekly market updates at https://www.pathpost.com/reports. In these reports, you will see if it’s a Buyer’s Market or Seller’s Market – think opposite. If it’s a Seller’s Market, that means the prices are headed up. If it’s a Buyer’s Market, that means prices may be headed for a decline.
3. Where are mortgage interest rates headed?
A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates. A simple 1% rise in mortgage rates could drop your buying power by $25,000.
We have also found that many buyers are still confused about what it takes to qualify for a mortgage. The right mixture of FICO score and down payment amount can drastically impact your borrowing power.
Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.