Is now a good time to buy a home? A question that many people ask, and one whose answer is much more complicated than a straightforward yes or no. The simple answer to this question is that there is no simple answer — there’s a lengthy list of elements to be considered that will determine the best course of action for you. Plus, given that the real estate climate has drastically transformed in the last year due to the pandemic, there is a whole new set of concerns that will factor into your decision. If you’re ready to buy and move into a new home but aren’t sure when is the right time to dive in, here are a number of factors, both internal and external, that will aid in your decision to buy.
Home buying typically peaks in the summer months leading into fall. Owners with children often prefer to go through a big move during warmer weather. They also find these months to be the most convenient because it falls in between the school year, so there won’t be any school conflicts, or changing schools in the midst of a school year, providing ample time to find newly listed homes for sale. Although the market experiences routine seasonality, this should not be the only factor in deciding whether to start searching for homes.
In a buyer’s market
Real estate is classified as either a buyer’s or seller’s market. When buyers have the advantage, there are a greater number of homes on the market, and low buyer demand, meaning less competition. Homes typically stay on the market longer, driving prices down, which are ideal circumstances for buyers. It’s important to know that as of now, we are in a seller’s market, where prices are higher and there are fewer houses for sale, making for lots of competition. If you’re still looking to buy, be prepared with a down payment, prep for a bidding war, and consider getting preapproved for a mortgage before making an offer.
When mortgage rates are low
2020 and all its chaos brought interest rates to historic lows, making it an ideal time for many to buy a home. While they may vary from lender to lender, it could be beneficial to get approved for a mortgage when rates are low because as history has shown us, they will inevitably trend upward in the future.
When you’ve outgrown your current space
While outgrowing your home can mean that your family has increased in size and you need more space, it can also mean that your house simply doesn’t meet your current needs. Especially now, millions of people are working from home, requiring more space for a home office. Or, with more time spent at home, some may come to realize that they would be happier in a home with a backyard, a pool, or an open concept floor plan.
When your finances are squared away
Buying a home is an investment that must be prepared for — it’s not one you can make overnight, especially when it comes to your financial situation. In order to be approved for a mortgage, you could be required to have a credit score of up to 640, depending on the type of loan. Also depending on which loan you’re approved for, it may call for a minimum down payment as well, meaning you will need to have thousands of dollars saved up. Not to mention REALTOR®️ fees, closing costs, and more. That said, saving this sum of money and building your credit score can often take years, so take these financial requirements into consideration when preparing for your home search.
To know the right time to buy a home, you must contemplate all the elements — the ones you can control and the ones you can’t. Getting informed of all that goes into the investment can help you make the most educated decision for you and your family.