Many people ask ‘should I buy a new home now or wait for better house prices?’ Rising Home Prices, near-impossible buying conditions, higher rates… is now the time for homebuyers to stay on the sidelines and not buy? In my newest video I’ll share my best advice for buying a home and 2 reasons why homebuyers should not be discouraged.
Check out the promo video!
HERE is the link to the full video.
Is it still time?
So, when is the best time to purchase a home? There will never be an ideal time to buy a home, but that shouldn't stop you from doing it now. It's been exceptionally difficult to find a home after 2020. Recently, housing prices in the United States climbed by an average of over 17%, more than double what they were in a typical year throughout the 2010s.
Today’s hot market can make finding the perfect home to buy a bit more challenging. Home prices have risen along with mortgage rates, and homes continue to sell very quickly. But while there are some challenges, the opportunity may be well worth the effort.
2 Reasons to stay the course and buy now
Reason 1 – Appreciation.
Many housing experts are forecasting continued home price appreciation this year and beyond. Let’s look at an example – If you were to purchase a $400,000 home today, and values increased near their historical average of 5%, you would gain $20,000 in appreciation over the next year alone. But should you wait to buy? Only if you are sure that home prices will go down. And by the way, Interest rates should not even be a consideration. Why? Because if rates come back down, you can’t refinance if you don’t own a home. So, the argument is that you wouldn’t buy if the market is flat or depreciating and that you will have the dumb luck to know when the market turns and get in at the bottom. It’s a pipe dream. I could go back in time during many cycles and show now that years later it was still a smart decision to buy. Why else is buying now good? Consider the alternative. Do you stay in the current home you are busting at the seams in? Do you keep making that commute? Do you not cash in on the equity increases you got? Do you consider renting, or living with family? Ok, let’s not talk about living with family. I’ve done it… and while I love my in-laws, yeah no. That brings me to the second reason that buying is still good.
Reason 2 – Most alternatives to buying stink, especially renting.
You think home pricings have gone up? Guess how much rents have gone up recently? According to Realtor.com, the median rent went up $300 per month in 2021. And sources like MBS Highway expect this trend to continue in 2022, albeit at a slightly slower pace. If you’re currently renting or are considering renting, while you may have a roof over your head, renting doesn’t help you build wealth like homeownership does. For example, that extra $300 per month you’re spending on rent, based on current rates, would be like having a $70,000 mortgage. Meaning if you were to use that extra $300 per month to purchase a house, you would have an additional $70,000 in buying power you could put towards purchasing a home. In this market that amount may just be that bidding war or price escalation. Additionally, when you purchase a home, that property continues to appreciate, helping you build wealth. But if you decide to rent, the only person building wealth through real estate is your landlord.
Your Action Plan
Email me at email@example.com your desired area of purchase and I will send you a breakdown of what this looks like in that specific market. We then we can chat to see what buying looks like and if it is a good option for you.
If you are in a bidding war, check out my bid-over-ask calculator at loanwithrick.com which will calculate using A HISTORICAL AND FORECASTED APPRECIATION MODEL TO SEE WHEN PROPERTY APPRECIATION WILL COVER THE ADDITIONAL BID OVER THE ASKING PRICE. Basically, at what price point is bidding over the ask become silly.
Any questions? Just reach out to me at 571-249-5363 or firstname.lastname@example.org