Many people are wondering if they should purchase a home now. Home prices have increased significantly in recent years, and mortgage rates are high. Most people believe that it is not a good time to buy a home at this moment. 73% of people responded this way in the September Fannie Mae Home Purchase Sentiment Index.
However, the market for housing is beginning to tilt in the opposite direction, with more sellers lowering their prices in order to attract nervous buyers. The available housing inventory in the U.S. has increased to 2.9 months of supply, which is a one-month gain versus a year prior. This signals that buyers will have more options to consider if they’re willing to lock in a higher mortgage rate.
The current market favors sellers, but there are some signals that this may be starting to change. The number of available homes has increased, which could mean more choice for buyers. Additionally, more sellers are lowering their prices in order to attract buyers.
Do I Buy Now?
The bottom line is that if you’re thinking of buying a home, now is the time to do it. Regardless of what the overall market is doing, you’ll be building equity in your home from day one. And with mortgage rates on the rise, it’s especially important to buy now before they go any higher.
If you find a property that you like and fits your needs, don’t wait to call it your home. You can’t time the market, and in the long run, it’s better to buy sooner rather than later. Even if prices go down slightly in the next year, mortgage rates will be higher, meaning you’ll pay more each month if you finance.
If interest rates rise, your monthly payments will increase. For example, on a $900,000 30-year loan at a 5.5 percent interest rate, the monthly payment is just over $5,110. If that rate jumps to 6.5 percent, the payment leaps to more than $5,688. Plus, you’ll wind up paying a lot more in interest over the life of the loan.
Here are some questions to think about that may make your decision more clear:
1. How is your credit?
2. Can you afford a down payment?
3. Will this be your “forever” home?
If you’re looking to borrow money, it’s a good idea to start by reviewing your credit report and credit score. The best deals on mortgages will be available to those with credit scores of 740 or above. If you have a history of on-time payments, you’ll be in line for the lowest mortgage rates that a lender offers.
Now is a good time to buy a house, especially if you have been able to save a lot of money. Lenders feel more comfortable loaning you money if you have additional cash reserves that can provide a cushion if something unexpected happens.
It’s important to be aware of the closing costs associated with purchasing a home, which can range from 2 to 6 percent of the property’s price. While these costs may seem daunting, they are worth considering if you plan on staying in your home for a while – or if you’re confident you can rent it out and cover the costs.
If you are still on the fence….
I understand how important and life-changing it can be to decide to buy a home. Whether you are buying your first home or ready to start the next chapter in your new home, I can be a guide and resource for you.
Fill out the form below and let’s schedule a quick strategy session so you can move forward with your real estate plans!
Also- HIT THIS LINK to get my complete First-Time Homebuyer’s Guide.