Is Now a Good Time to Buy a House?
Why Waiting 12-18 Months Could Make it Harder
Are you thinking about buying a home?
Whether you’ve been building your savings for years, or you’ve just decided that you’re finally ready to settle in a home of your own, you may find yourself wondering whether or not now is a good time to buy a house.
Especially with the way the market has been over the last year, you may be thinking, I feel like maybe there's going to be a market crash and I should just wait a little bit longer.
So here's what I'm going to tell you… I believe we’re going to be a sellers market for a while.
Buying a House in a Sellers Market
The first thing you need to know is it’s going to be hard. It may take a while, so you’ll want to plan for a good 18 months or so to buy a home.
So then you might say, “well then why don't I just wait?”
Well, here's the thing: in 2020, the median appreciation in the entire country was 10%... TEN PERCENT — that’s nuts, right?
That means the average American homeowner last year, earned about $24,000 of home equity, which is unheard of; it’s crazy town! Plus, right now, it’s expected that it will probably be about 10% this year again.
The thing is, even if it’s only 5%, that’s still going to make an impact on your overall cost to buy if you wait. Whether you're buying a $300,000 house or a million dollar house, that house is likely to be even more expensive in another year.
So the real question becomes, how long are you willing to wait for the market to settle down? Because right now, we just don’t know when that is going to be.
Considering Interest Rates in Your Plans to Buy
The market isn’t the only thing that may cause the cost of buying a house to go up. You also have to consider interest rates.
Interest rates are expected to start climbing a little bit — not much — I'm not trying to scare you here. I mean, I don't think they're going to skyrocket, but it’s still important to consider. Even if the current interest rates go up a quarter of a percent, that house you were thinking about buying is now going to be even more expensive.
So, if you think about it from the context of: would you rather start building that equity appreciation now, or would you rather keep renting or living in a smaller home, or whatever your situation may be, until who knows when?
Personally, if I were living in a smaller home with plans to buy a larger home, I would rather sell that house now and make what I can, and then get in the more expensive home before the prices go up again.
The Bottom Line
To sum things up — if you’re asking my opinion about whether or not now is a good time to buy a house, I would say, 100% yes.
I know there may not be a lot of choices out there, I know there are bidding wars, and I know it won’t be easy. So, if you can't get one, I understand, and you need to understand that too.
I'm not saying you should just take anything — buying a home is a big deal and you need to do what’s best for you — but what I am saying is, if you're able to get in, and if it makes financial sense for you, go ahead and do it because it's probably going to stay hard for awhile.
If you ask me, I think it's only going to get more expensive as time goes on, so the sooner you buy a house, the better. I hope that helps. If you think you may be ready, let’s start the conversation now. I’d be more than happy to assist you through the process.