Typical home financing involves a buyer finding a home and applying for a mortgage, getting…
If you’re on the fence about whether now is the right time to buy a house, we’re going to tell you right up front that it is. It most definitely is!
It’s true that sellers remain in the driver’s seat and that makes it tough for some buyers to get into a home. But that doesn’t mean you shouldn’t try if you’re looking to buy. The challenges for buyers haven’t changed much in the last few years. Homes are still in short supply in many markets, and they aren’t coming cheaply, either.
Despite that, there’s no better time to look for a new home than now.
Mortgage Rates Are Still Low
Yes, they’ve been going up in the last couple years. A 30-year fixed rate mortgage one year ago was 3.92% and this year, it’s 4.87%. but don’t let that get you down. Today’s rates are still pretty good and even if they do go up again next year, they will still be at historical lows. The annual average for 2000 was 8.5% and in 1990, it was 10.13%. And we’re certainly a long way away from the high rates of the 70’s and 80’s.
So interest rates are still relatively low and likely to stay that way for the next few years. Even so, the rates are trending up every year, so if you want to buy a house, now’s the time to get serious about it.
Home Prices Are Likely To Slow
It’s not news to most that home prices have been rising crazily in some areas of the country. Low inventory in many markets has fueled high home values, especially in those markets with thriving job markets.
According to Zillow, the median home value in the U.S. as of October 2018 is $221,500. Zillow is predicting in 2019, however, that while home values will still rise, they’re going to rise at a slower pace than in previous years.
That’s a correction that’s been due for a while. Difficulty in affordability has made it impossible for some folks to buy a home.
The Economy Is Good
More Americans are working and saving and spending comfortably these days. With an economy that is at or near full employment, more Americans are looking at buying homes than in a very long time. If a big purchase like a home is within your reach, then jump in. You won’t regret it.
A Word About Timing…
There’s often talk of the right time of year to buy a home. True, many prefer to sell or buy a house in the spring or summer, when kids are finishing up school, but the truth is the best time to sell or buy a home is when you’re ready. That means that when you’ve saved up enough for a down payment or when you’re making a comfortable living and there’s room in your budget for something bigger and more important than monthly rent, you can think about buying your first home.
Ideally, you should limit your housing costs to 25% of your monthly budget. If you feel you’re ready to start looking for a home, then it’s probably time, no matter what the calendar says. Afterall, realtors aren’t known for running holiday specials and bankers are unlikely to run white sales and Independence day bargains on interest rates.
If you feel it’s time to buy a house and your budget agrees, then start looking. There’s no time like the present!