Is now a good time to buy a home?
The answer is probably YES!
This is the best market to buy a home that I have seen since I started selling real estate some 25+ years ago. Here are the reasons why: home prices have fallen and even if they continue to go down, I don't think it will be significant enough to out-weigh the other positives; interest rates are at record lows and are sure to increase with even the smallest improvements to the market; and lastly, the inventory of available homes is high...sellers are competing to get their homes sold!
That said, there are some cautions
to think about. The right answer is that buying a home should depend more on your own personal situation, than on market conditions or other people's advice. To assess your own situation, you'll want to weigh the pros and cons of buying.
Here are six key factors to consider:
Employment: If your income is steady, you may feel confident in buying a home now. But if your job feels insecure, or you may end up relocating to take a different job, you may not want to commit to buying a home just yet.
Mobility: If you are planning to move within a few years, buying a home now could turn out to be a costly choice if prices do decline, even by a little bit. But...if you're planning to stay in your home for a while, housing purchases have always been a good long-term investment. Usually the best investment most people ever make.
Budget: If you aren't certain you can afford to own a home, buying now might not be realistic. But if you've assessed your budget and feel you're financially ready to handle a mortgage payment, property taxes, homeowner's insurance, and maintenance costs, becoming a homeowner might make sense for you.
Prices: If you already own a home, you may be hesitant to sell at today's prices. Keep in mind that if you sold your current home for less money now, you might be able to buy your next home also at a lower price. Especially if you are making a move-up.
Rent: If you're renting and your rent is affordable, you may want to hold onto your apartment. But be aware, rents are on the rise in your area and purchasing a home may allow you the security of a fixed housing payment. Trading your apartment for a home also could give you several additional tax deductions.
Interest Rates: Remember that higher interest rates can wipe out the benefit of lower home prices. For example, if you had a 30-year fixed rate loan of $300,000 at 4.5%, your monthly payment would be approximately $1,500. If instead your loan amount was only $280,000 but interest rates were at 6.5%, your payment would be around $1,770...which would be $277 more per month for a home worth $20,000 less!