First and foremost, we hope you and your family are having a good summer and staying safe and healthy during this weird year. As things have played out in the real estate industry throughout this pandemic, I wanted to answer a common question I’ve been hearing: Should I buy now or wait until next year?
I think it’s important to realize that no matter the market conditions, there are six questions you need to answer to determine whether buying a home is the right move for you:
1. Are you committed to being in one place? Homeownership is a long-term game. We don’t know what the future holds, but if you’re committed to staying in a home for five years or more, you’re on the right path.
2. Are you committed to homeownership? Like having kids or pets, homeownership is a responsibility. The home needs to be cared for and tended for.
3. Is your credit score up to standard? Credit standards change from time to time. In March, we saw lenders tighten credit standards, raising the minimum score requirement. You need to know where your credit score is so that you’re in the best position to capitalize on good financing terms.
4. What’s the state of your finances? Do you have money for a down payment? What about closing costs? You want to be sure that you have enough money to cover any obstacles. An emergency fund is important; capital reserves, too. I’d say you want 3+ months of living expenses saved up to start.
5. Do you have job stability? If you have confidence in your job security, you can check off that box.
6. What’s the current state of the real estate market? Right now, we’re in as heavy of a seller’s market as I’ve ever seen. Demand is sky high and inventory is extremely low. This might make you think that waiting is a smart move, but is it? Affordability for homebuyers is as good as it has been in 25 years because of low interest rates, and buying with these conditions might make perfect sense for you. Even if you wait for prices to drop by $25,000, if interest rates go back up by 1%, you’re going to end up paying more for the “cheaper home.” Factor this into your decision as well.
If you have any questions, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.