Homeownership is frequently considered part of the American Dream. You work hard, you find a great job, and then you save up and buy your dream home. But even if it’s something you’ve personally dreamed about, are you sure it’s the right time to buy? These three considerations can help you determine whether you should get ready for a homebuying journey or not.
First, What Type Of Market Is It?
Typically, there are two types of markets: a buyer’s market and a seller’s market.
A seller’s market usually means inventory is low (because homes are bought up quickly), prices are high, and/or competition is high. Because of this, it might not be the best time for a home buyer. It can make the entire home buying process take longer than normal and you might potentially encounter more obstacles.
Conversely, in a buyer’s market, inventory is typically higher, prices are lower, and/or sellers are more apt to make better deals. Though this does not hold true in every market as there are some markets that are always highly competitive, it’s a general rule of thumb. When it’s a buyer’s market, it’s obviously a great time to be a home buyer.
Knowing what kind of market you’re dealing with and whether it might still be a good time to buy even if it’s a seller’s market is exactly why you hire an experienced real estate agent. They will have analyzed the different neighborhoods and can help you assess whether it’s the right time to dive in.
Second, Can The Buyer Afford The Costs of Owning A Home?
Even if you believe yourself to be in a great place financially, you absolutely want to consider whether you can handle the potential costs of home maintenance and repair.
For many who rent, their agreements account for appliances breaking or when items need to be repaired and replaced. Some rental contracts even include things like lawn care and snow removal.
A buyer will want to ensure they are able to take on these expenses on their own. In addition to maintenance costs, there are also other fees to consider such as HOAs. Both CNBC and NerdWallet explain more in-depth exactly what possible hidden costs could arise with home ownership.
Third, Are You Ready To Settle Down Into One Location?
On average, buyers will spend around 9 or so years in a home. For those ages 29 – 38, the average can actually be closer to 5 years. Either way, it’s important for a buyer to consider his or her personal circumstances and plan for down the road if they are looking to commit to buying a home.
Of course, nobody can foresee the future and all things cannot be predetermined or predicted. But you’ll know your own circumstances best. If you know you’d like to settle in one area for awhile, then it may be the perfect time for you to buy. On the other hand, if you work in a field where you’re moving every few years, it may not make sense to purchase a home.
Take stock of your personal situation and decide whether you’re ready to plant your roots or if you’re not quite sure you want to settle down.
As much as you might want to take that next step and own a home, sometimes it can make more sense to hold off. Take these three elements into consideration as you consider your finances and your personal circumstances. You should also feel free to talk to an experienced real estate professional who can help you navigate these calculations and work with you to decide whether or not it’s the right time for you to buy.