Wednesday, August 11, 2021 / by Natasha Salter
Is It a Good Time to Purchase a Home?
The real estate market has been crazy bananas, to say the least, for the last year! Inventory is at record lows in most markets and the pace of sales is unbelievable. We have all heard horror stories about people being outbid by thousands of dollars and searching unsuccessfully for months. So, why would anyone want to try to jump in this race right now? There are actually some good reasons. And the truth is, right now is a great time for some people to purchase a home, but not everyone.
Two reasons now is a good time to buy.
First, interests rates are really low. If you have ever owned a home and taken a look at your mortgage statement, you were probably shocked. I know I was in disbelief the first time I realized how little of my monthly payment went towards the principal amount of my loan versus the interest. These lower interest rates equate to lower monthly payments and less overall cost of the loan.
Second, home values have greatly increased. This means you have the opportunity to gain equity rather quickly. Making your house a good investment. Some homeowners have been able to sell for a profit in less than a few years. Although there has been some nervousness over the rising home prices, economists do not feel we are in a housing bubble. This means we do not anticipate a drop in house prices or their value anytime soon.
Two reasons now might not be a good time to buy.
First, the level of competition driven by the low inventory. Buyers have to be prepared to see a lot of houses and make a lot of offers. Buyers are having to make quick decisions, which can feel like pressure in this high-stakes situation. It is also easy to get discouraged during the process or have regrets after the purchase.
Second, home prices have increased. With such high demand for houses, sellers realize they can ask top dollar. Buyers are often paying over asking price in some areas and putting down large amounts of earnest money. In addition to the increased prices, some homeowners are giving preference to conventional loans. Loans that require less of a down payment, such as FHA and VA are having a more difficult time getting offers accepted. Down payments and earnest money are upfront costs a buyer needs to consider when deciding to purchase.
So, is it a good time to purchase a home? It really depends on your desires and financial situation. The important thing is to take a look at your finances and then have an honest conversation with a trusted loan officer. Only you can decide if now is the time. And if it is, you definitely want to have a reliable real estate agent and lender to help ease your process.
Peace, Love & Real Estate