Given all of the drops in the housing market in the last few years, many people are wondering whether now is the right time to buy a new house. Should you snatch up the good deals before prices start to rise or should you wait it out a little bit longer to see if the prices will drop even more? It can be somewhat of a gamble, so it is important to make sure that you know a few facts about the current market so that you can make the best possible decision.
One of the most important facts you should consider when determining whether now is the right time to buy a new house relates not to the market but your own situation. Consider how long you plan to live in the home. While you might not be able to look into a crystal ball and see the future, consider what you know at the moment. If you know for a fact that you plan to upgrade or even move out of the area within the next five years, then now might not be the best time commit to the purchase of a home. On the other hand, if you feel fairly confident with the fact that you will be living in the home for at least five years, then now could be a really good time to purchase a home.
You also must consider how comfortable you are with taking risk as well. If you feel comfortable with a possible 10% or even more drop in a home price if you need to re-sell within the next few years then now might be a fine time to make a purchase. If you are not comfortable with risk, then it is probably better to wait and see how the market settles before you make a home purchase.
This is because the reality of the current market is that the fluctuations have not yet stopped. During the year, prices are most likely to continue falling. It is also important to keep in mind that you should not get swept up in the hype that is often presented in media advertisements. One of the biggest half-myths that is currently circulating is that the affordability of homes is improving across much of the country. While there is some truth to this, consumers should be wary about taking this and running with it.
In addition, consumers should be aware that lending restrictions remain tight throughout much of the country as well. Loans are available for the purchase of a home, but restrictions are much tighter than they were in the past. Make sure you know exactly what is on your credit and how much you will be able to offer for a down payment before you consider purchasing a home in the current market. At the current time, lenders simply are not comfortable with taking a high degree of risk when it comes to mortgage loans and as a result, they tend to be more conservative when offering approval.
It is also important to be wary of making assumptions, such as whether your home will appreciate over the next few years. While at one time this might have been a safe assumption that is no longer the case. If you plan to buy a new house in the current market, you should be fully aware that there is the potential for the value of your home to drop over the next few years rather than appreciate. You should not assume that your home will steadily gain value the longer that you own it. This is a gamble that you should be fully aware of before you begin shopping around with the intention of making a home purchase.
While now could very well be an excellent time for you to buy a new home, it is important to consider your own situation as well as how comfortable you are with taking possible risks over such a large purchase in the next few years. The current market certainly is offering good deals in many markets, but before you rush out to grab one, make sure that you are fully informed.
Source: Buy and Sell House Fast