Prices are up, I’m not buying my first home until they go back down. This is a phrase I hear a lot. Buyers are trying to minimize their risk, and waiting for prices to go back down. The problem with this thought process though is, what if the prices don’t go back down. Are you going to wait out the next recession? What if prices drop a bit but interest rates go up?
Historically home prices double every 10 years.
One way to think of home prices is to think about playing with a yo yo while walking up the stairs. They might go up a little and go down a little but overall they are going up.
More than looking at the housing market and trying to guess what’s next to make a decision, it is better to look at your situation and see if the timing is the best.
How long are you planning to own a home? If there is a good chance you are going to be relocated 6 months, you may want to wait. If you are looking to live there until your toddler graduates from high school, it may be a good time to buy. If you are getting ready to have a change in lifestyle, be it taking in an older relative, to getting married, you may want to wait or determine what will be required in your housing once you have the change in lifestyle. There are many personal reasons why a house today may not be the right house in 6 months to a year. If there is uncertainty in the next couple years, it may be a good time to wait because if the market does go down a bit and you have to sell you may be in a bit of a bind.
What are your longterm goals? Does a home fit in to the goals? Maybe all the talk of own a home, own a home, own a home, doesn’t actually fit for you. Maybe you are the type that doesn’t want to be tied down in that case this probably isn’t the right time to buy a home regardless if the market is up or down.
After taking to a lender, how comfortable are you in making the payment? If you are going to be house poor to get the home you have your eye on, maybe this isn’t the right time to buy your house. Regardless of the housing market, it may serve you best longterm to continue to save so you can be a little more financially sound before buying your first home. Save more and put a larger downpayment so your monthly payment is lower.
At the end of the day, you are in control of your personal housing market. If you are going to live there for a while, you may not be sensitive to little ups and downs. If you are going to need to possibly sell in the future than you are going to be sensitive to those changes. Evaluate your situation and see if it is the right time for you to buy. A good realtor and lender can help you with some of the technical answers.
Looking for more first time home buyer answers? Consider coming to our FREE first time home buyer classes www.WAclasses.com or call Dawn for a FREE personal consultation.