Jul 28, 2024 Current Resources

Is Now A Good Time To Buy A House?

(TheDailyCurrents.com) – Purchasing a home is a significant investment you must think about carefully. It involves thoroughly researching the housing market trends to find a property that meets both your needs and budget — the latter being a difficult puzzle in may economies. Currently, the real estate market is experiencing numerous uncertainties, including rising mortgage rates and a low inventory, which can affect your home buying.

According to Fannie Mae, the number of people who believe now’s the right time to buy a home has fallen to 16 percent. This is the lowest percentage Fannie Mae has recorded since 2010, when they started tracking data in their yearly National Housing Survey (NHS). This article explores factors determining whether this is a good time to purchase a home.

Mortgage Rates

Mortgage rates refer to the interests lenders charge on mortgages. These rates can be fixed or variable, depending on the benchmark rates set by the Federal Reserve. Lending institutions can also use your credit score to determine your mortgage rate. Typically, a poor credit score will result in higher rates. Since 2022, mortgage rates have steadily risen, with a 30-year fixed-rate mortgage averaging at an all-time high.

The reason for this is the Federal Reserve’s decision to raise the federal fund’s rate by 4.5 percent to regulate inflation. Higher rates make it difficult for consumers to buy a home as they make loans more expensive. However, you can still get a good deal on mortgage rates by shopping around and negotiating with your lender.

Inventory

Inventory in the housing market refers to the number of properties listed by sellers. Over the past few months, a significant shortage of inventory levels has been noted in the US. According to the National Association of Realtors (NAR), only a 2.9-month supply of homes was on the market in December 2022. Various factors, including higher home prices and declining sales, have contributed to this low inventory.

A shortage of inventory creates a rise in demand for homes. Consequently, the laws of demand and supply will force sellers to increase property prices, making it hard for buyers to find those that suit their budgets and needs.

Home Prices

When looking for a house, adequately research home prices. Doing so lets you find the best value for your money and know the types of properties that fall within your budget. The price of homes has been increasing slowly each year. For example, the median price for existing homes sold in October 2022 was $379,000.

This was an 8 percent increase from June 2022, when the national median price reached a record high of $413,800. Home prices are always likely to shoot during the peak spring home-buying season. So, you may want to avoid purchasing a house during this time if you desire a good deal. You can, however, consult with your real estate agent to understand the ideal value for homes in your area before making an offer.

Your Readiness To Settle Down

Besides the housing market, analyze your readiness to settle when looking to purchase a home. Several factors can help you determine this, including your job security and financial capabilities. Preferably, wait until you have a stable job before buying a home with a mortgage. A mortgage is a long-term commitment that can drive you into severe financial struggles if you end up in a situation where you can’t afford the monthly payments.

Additionally, evaluate your financial abilities to ensure you can effortlessly afford a down payment and other mortgage closing costs. Note that lenders also examine your credit history when deciding your mortgage rates. If you have a bad credit score, you may struggle to find a lender willing to finance your home purchase.

The current housing market is very competitive. You must, therefore, do your homework to find a property that suits you. Evaluate the mortgage rates, inventory, and median market prices for homes in your area before making a purchase decision. Lastly, ensure you have a stable job and are financially prepared to service your mortgage with less struggle.