09 Feb Is it the right time to buy a Home?
Is it the right time to buy a Home?
The short quick answer is…yes and no!
Buying a home has always been a challenging process and with the current pandemic it definitely hasn’t gotten any easier! If you are in a strong financial position today and are ready to commit to the process then, it could be the perfect time to purchase a home!
It’s a good time to buy a home now because…
With the country battling a huge pandemic you might think that it’s a bad time to make one of the largest purchases of your life but, there are some upsides for purchasing that home now!
1. Mortgage rates are crazy low at this point!
While most experts believe that mortgage rates will remain low, there are no guarantees. The lower rates would save you thousands over the term of a home mortgage. For example: You would pay approximately $116,000 in interest over a period of 20 years with a mortgage rate of 5%. While only paying about $66,000 in interest for a 20 year mortgage with a mortgage rate of 3%…that’s a savings of $50,000! I would definitely prefer to put that extra month in my retirement fund!
2. Do you have more time to move?
I am NOT a big fan of moving and when I am super busy at work it is even more stressful! However, due to Covid, maybe you are slow at work, taking some time off or working from home. This could create some flexibility in your schedule without worrying about what is happening in the office.
The downside to buying a house now…
The thing with upsides is that there are always downsides and buying a home now is no exception!
1. It’s currently a sellers market
A seller’s market is when given market conditions create a higher demand for buying a home and there is low inventory. When comparing home purchases from 2020 to 2019 it is apparent that home sales have dropped off over all but, new home inventory hitting the market for sale has dropped by a greater amount. This gap between available home buyers and home sellers tend to drive up the price of homes within the given market. When considering real estate in Chautauqua, New York, my immediate market, this trend is also reflected in the data that I’ve reviewed.
2. Many Lender’s have become a bit nervous
The uncertainty of the economy, pandemic and administration transition has caused some lenders to slow down and tighten up some of the requirements. If your credit score is a bit “iffy” then you probably wont qualify for the lower mortgage rates. Talk with you lender and they may say that you are better off using this time to do a little credit touch up!
We are in a recession…but, really? I’ll leave that up to the experts to talk about! But, it is very true that nobody really knows how all of this is going to work out over the next couple of years. You may be more likely to lose a job or need to collect unemployment. If you don’t have a little savings to cover mortgage payments in down times you might be better off using this time to save.
So, is it time for you to buy a home now?
Well, this is a hard question that you can only answer after crunching some numbers and reviewing the pros and cons.
It really helps to understand your true reasons for wanting to buy a home now. Will you save thousands on the purchase? Will owning be less expensive than renting? All of this makes a huge difference.
You will also want to take a look at your current financial position. Do you have enough money to cover a down payment, closing costs and have enough left to cover at least six months of mortgage payments? Trust me, if you over extend yourself financially with a home purchase, it is no fun at all! That type of stress will find its way into other areas of your life including work and relationships! If there is any question…wait!
I am always available to discuss your options! Please feel free to call, text of email me to talk or to setup a free consultation.
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Realtor | Associate Real Estate Broker
ERA Team VP
MLMcVinney & Associates, LLC
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