We’re at the beginning of a housing recovery. Everyone is sprinting out of the gates to get into the real estate market. Mortgage loan rates are low. Credit is becoming easier to get. The economy, despite dips here and there, continues on a gradual, upward incline. People are feeling more secure in their jobs. Home sales are up in some areas, but prices are still down from where they were before the 2008 market bust.
All these trends tell the same story: It’s a good time to buy a home. But is it a good time for you to buy a home? The timing may seem right, but everything else needs to be right, too.
Here are some things to consider before jumping into the market.
The perfect home might not be out there right now
Buying a home isn’t like buying a high-definition TV. It’s not an impulse purchase, either. It’s likely the biggest purchase you’ll ever make. Your home is your solace. It’s the place you’ll return to after a long day, where you can escape from the stress of the outside world, where you’ll make memories with your family. It’s important to make the right choice.
Meanwhile, in many markets the housing inventory is tight. With fewer homes to choose from right now, you might not find the right place that will feel like home to you. If that’s the case, wait! More inventory will eventually come. If you settle for a smaller house now because you want to “time” the market, you will be stuck selling and then buying a larger house in just a few years.
Wait for the home you’ll be happy living in for at least five years, if not 10-20 years. And if you don’t feel like you’re going to live in your home for at least five years, you may be better off renting anyway.
Buying a home is a journey
The home buying process is an evolution. It can take twists and turns, and you may end up in a type of home or a location that you least expected. Most buyers spend up to one year on the home search from the time they engage their real estate agent until they close on the home. Learning and getting comfortable with your local market takes time and experience. Buyers spend months looking at listings and doing online research before they even contact an agent. Feeling competitive with your co-worker or friend who just bought? Don’t. For all you know, they were looking for many months before you even thought about buying.
Don’t be seduced by low prices and interest rates
Even though our world moves quicker and information flows faster than ever today, real estate was always meant to be a long-term investment. If you’re in it for the long haul, you shouldn’t be focused on buying at the right “time.” Make the best choices not just for today, but also for years from now.
Don’t feel pressured to buy because of rising interest rates or the fear of home prices rising. Interest rates, though they have gone up recently, are still at 30- and 40-year lows. When the time is right for you to get serious in the market, negotiate the best price possible and lock in the best rate possible. Look for homes where you can create value.
Slow and steady wins the race
The best strategy, today and always, is simple: Buy the home that’s best for you, when it’s the right time for you to buy. As always, research the market as much as possible. Talk to your agent. Think everything through carefully and calmly. Be proactive — not reactive.