Are you looking for a home and having a hard time? There aren’t any available, and they’re too expensive or way too far. They vanish as soon as they come to your attention.
Maybe it’s something else. You’re on the fence, as the saying goes, unsure what to do? Ah, one of those somewhat savvy types? Waiting to jump in at the perfect moment, right?
Either way, articles, and the media make it unclear or frustrating- I get it. Family and friends have opinions too.
Should you buy a new home right now? The answer is likely yes if you’re serious about buying. Here’s why. I’ve yet to meet a long-time homeowner that purchased when they were ready that is: underwater, hates their home, or in a tight situation because of their home.
Home prices are up, and the supply of homes remains low. Cash transactions are up, yet some home buyers can’t afford a home. Others join interest lists or lotteries. It’s a temporary thing, but again, if you’re ready and you know it – go. The FED may raise interest rates soon.
Demand is high, and the lenders have not drunk too much this time around. The mortgages this time are of a higher caliber than the mortgages leading up to the ’08 crash. And they’re fixed-rate mortgages, too.
I’m optimistic, and I don’t believe our country will continue down this destructive unchecked spending path. Soon, the unintented negative consequences will be too much to bare and we’ll start to agree on financially prudent moves.
Hopefully, this opinion will help those of you in the proper position.
Let’s start with my opinion first, if it wasn’t clear above. Because it rarely changes when buying a home.
Question: Should you buy a house if you like the home, are financially prepared, have a stable income, and plan to live in the home for a long-time?
Interest rates are at all-time lows, and over 30 years, low-interest rates can save you thousands of dollars. Low-interest rates are the only reason homes are still affordable for some Americans. Check out the example below.
Purchase price: $500,000
Loan after 20% Downpayment: $400,000
Credit Score: 700 – 719
Principal Loan: $400,000
3.381% = $1,770/month
6.413% = $2,497/month
Source Google’s search engine calculator
The estimated cost for taxes and fees is $667/month, but your situation will be different.
Take a look at the difference in the cost of each mortgage above. Three (3) basis points added over $600/month to the cost of your mortgage.
That’s a lot—that used truck you want ‘a lot.’
If you meet the criteria above, buy a home when you find the one you want. We are not in a bubble; demand has increased prices for all homes, especially in hot markets.
The when is the question. Are you patient? If so, you might want to see how things go over the holidays.
That’s me unsure about whatever we have going on in D.C. right now. It’s a mess, people, but it often is, so let’s live our lives.
If the financial world doesn’t come to a halt, the price declines will be negligible for lower-priced homes. That said, we could see some decent decreases in the middle-high and the high-end luxury market.
If you’re not financially prepared, wait until you are.
If you plan on buying the home and selling it quickly, investment time was over long ago unless that’s your gig.
And if you can’t find a home you can afford, don’t worry. Homebuilders will find a way to make more affordable homes. Check out national builder inventories now.
Here are some recent headlines and articles you might want to check out