Estimated reading time: 5 minutes
The most appropriate time to buy a home likely depends on a number of personal needs along with more wide-ranging factors. Personal reasons, such as a change in your job or family situation, may require you to move, while more general conditions, such as the economy and market, play just as important roles in your home-buying decision. Some people try to time their purchases when most or all of the factors are in positive alignment but, as we all know, that rarely happens. Read on to learn about some aspects to consider so that you are not unnecessarily influenced about the best time to buy your next home.
PERSONAL FACTORS
Aside from having to move because of a new job or a family emergency, you should start out by weighing your personal plans and goals. Are you planning to settle down in a specific area long-term? Do you have a growing family and need more space? Is downsizing a necessity? Can you comfortably afford the current expenses associated with your housing, or would it make more economic sense to make a move to lower your monthly bills? These personal questions are probably the largest determining factors in the timing of a new home purchase and they will most likely override most general factors such as the economy and mortgage interest rates. Take a few moments to write down your personal and family goals then determine the necessary timing based on those key timeframes in your life.
WIDE-RANGING FACTORS
The economy, market conditions, and the season may also impact the timing of your next purchase. Read on to learn more!
Economy: Does an overall stable job market, low unemployment rates, and positive economic growth apply to your personal situation? It really shouldn’t matter what the national statistics are if you have a stable job and a reasonably secure financial base.
Conclusion: Don’t let macroeconomics dictate or overly influence your own capabilities or needs.
Market Conditions: Potential buyers often pay attention to housing market trends including interest rates, home prices, and inventory levels, thinking that the best time to buy is when those three are perfectly aligned in favor of a home purchase. While most homes are products desirable to specific sets of buyers, supply and demand market forces tend to give mixed signals and results depending on the geographic area.
We have seen in the past that when interest rates are low, more buyers buy causing inventory levels to be low, eventually putting upward pressure on home prices. On the contrary, when interest rates increase, some buyers wait or get knocked out of the market causing inventory levels to go up, resulting in a decrease in home prices over time.
Some renters may find that even with higher interest rates, their monthly mortgage payments are less than the rent they now pay, and the purchase of a home remains enticing. For non-renters, it is worth noting that while current interest rates are higher than the previous 10-15 years, they are still below the historic highs of the 1980s.
Regardless of the situation with interest rates and market conditions, people still need to buy and sell properties for a variety of reasons, and if you are financially able and in need of a new home, don’t let the desire to wait for a perfect market get in the way of a home buying decision. Historically speaking, wage increases make that new home more affordable as time goes on.
Conclusion: Don’t wait for a perfect market to sell or buy a home based on a personal need or financial ability.
Seasonality: Although it is widely believed that real estate markets are seasonal, especially when colder weather applies, it is more myth than reality. While many buyers and sellers with school-age children prefer to wait until summer, buyers still buy every month of the year, and sellers who wait for spring may actually receive less for their homes. Because many sellers wait for spring to put their homes on the market, it results in an increase in inventory with resulting downward pressure on prices, and buyers waiting to buy in the spring may find more competition for better homes resulting in costly bidding wars.
Conclusion: Don’t believe the myth of seasonality when it comes to your decision; buy when your personal situation requires or allows.
Ultimately, the most appropriate time to buy a home is when you need to move and can afford to do so. Don’t wait for the ideal time when all factors are in favor of such a move; it may come and go or, worse, it may never come. I am ready when you are, and I would appreciate the opportunity to help you move when it’s right for you!
Advice from writer,
Brittani Dick
“There’s nothing wrong with being content with where you are, but if you have that nagging voice in your head telling you to ‘just go!’ then do it.”