The question of when is the right time to buy a home has been asked by countless prospective home buyers. And the answer to that largely depends on what one means by “the right time.”
When is it the right time to buy according to the market? When is it the right time to buy according to your current financial situation? When is it the right time to buy considering life goals and opportunities?
As you can see, the “right time” is a very personal thing. Let’s go in-depth and look at each of these situations. Remember to contact us for a personalized recommendation and get matched with a mortgage loan program that fits your right time.
Buyer’s market. Seller’s market. Even seasoned real estate investors can have trouble nailing down the “right time.” But there are a few things that may help you gauge whether the market is right for buying:
1. Price trend in your desired area: Comparing the historical home costs gives you valuable insight as to whether you can expect prices to rise quickly or stay steady. It’s useful to compare those trends with other areas in the county to see the bigger picture for asking price and home sales.
2. Home sale trends: If home sales seem to be moving slowly, it’s a good indicator that it’s a buyer’s market and potentially a good time to buy. Sellers may be more willing to negotiate, and there may be less competition.
3. New construction slowing down: You’ll want to watch out for lagging construction as this can mean housing will be in short supply, driving prices and competition up.
4. Interest rates: Another number you want to look at is interest rates. Now this one is a little tough since rates are changing all the time, and there’s no absolute way to predict what it will be next week or even tomorrow. However, there are several key indicators that mortgage professionals look at to gain insight. Working with a trustworthy mortgage loan officer is key as they can guide you when the right time to buy is considering mortgage rate trends.
The market and current mortgage rates play a critical role as to whether it’s the right time to buy a home, but so do your finances. You may have heard that you need to save 20% for the down payment. If you don’t have 20%, you may think it’s not the right time to buy. However, certain loan programs let you purchase a home with as little as 3.5% --some even less than that! Even a struggling credit score may not affect your “right time to buy.” Government-backed home loans allow banks to issue mortgage loans to buyers with lower than average credit scores. If fear of getting denied a home loan due to low credit has been holding you back, now could still be a good time to discover the possibilities.
With the above mentioned in mind, let’s now consider your life goals. Are you ready to set roots –for at least five years --in one community? Ready to invest with long-term payoff? Tired of renting and the inability to customize your home? If these scenarios sound like you, then now could be the right time to buy.
Even in less than favorable real estate markets, favorable rates and life circumstances may mean that it’s your right time to buy. Contact us today to learn about your mortgage options and discover if it truly is the right time for you to buy!