Is this the right time to buy a house?

Investing in real estate can be a dicey gamble. Many potential buyers attempt to read between the lines, if the housing inventory is high or low, how the volatile market trends, the way interest rates and mortgage rates impact the house purchase. Undoubtedly, there are the quintessential metrics to determine if this is the right time to buy a house.

Buying a home is a crucial milestone –it can be a source of building wealth if the prices are appreciating. But timing alone is not the whole ball of wax though it has supreme significance. However, the legit time to close the deal is when you can afford to dwell well.

The housing market has seen a significant boom in the buyers’ market during 2020, as the low mortgage rates are at historic lows. The mass relocation during the pandemic coupled with low mortgage rates has driven the home inventory significantly low, which in turn resulted in soaring home prices in 15 years. According to the statistics provided by Zillow, the average rate for 30 years fixed mortgage was 2.94%. The same trend continues in 2021, and the new home sales have hit 6.7 million that is 23% higher than the previous year.

The reasonably low interest rates, rock-bottom mortgages, and market gains yield an appealing deal for potential buyers. But to decide whether or not you are ready to take a leap of faith into homeownership, you are required to vigilantly process these essential aspects to lock a decisive conclusion.

Mortgage rates

The mortgage rates dropped reasonably through the first half of June since mid-April. At the same time, the prices may tend to climb up slightly during the rest of the year. The Federal Reserve vowed to keep the interest rates low. Though the policies tend to influence the current mortgage rates, the likelihood is if the interest rates remain low, the mortgage will also endure low rates throughout the year. This indicates the lower the mortgage rates; the lesser will be the home loan paid by the new homeowners.

Housing Inventory

Intense bidding wars create fierce competition when there is a striking imbalance of demand and supply. It is a rugged game-changer for buyers. The scarcity of house supply makes it difficult to find a property that meets your expectations. The data released by the National Association of realtors displayed that the home inventory in March 2021 was down to 28.2% in comparison to the same month the previous year. The taut housing market doesn’t seem a buyer’s haven at this time of the year unless you have plenty of cash to compromise.

Housing Prices

Are you buying a home in 2021? You are likely to splurge exorbitantly to get an offer excepted. The depleted housing inventory has hiked up housing prices to an extent that the median house price in April 2021 was 17% higher than it was at the beginning of the pandemic. Spring has historically been a great time to list home sales.

Lender requisites

Even though the mortgage rates are likely to remain low, the soaring pandemic economy has tensed the lending criteria and locked out buyers with bad credit scores. The first-time homebuyers looking towards brokers for down payment guidance might be disadvantaged in the surging market where cash offers are abundant.

Readiness to buy a home

It is not just about timing the market; you need to be sure about your readiness and willingness to own a home. Do you have a secure financial status and job security to close the deal? A mortgage is a substantial commitment that can become burdensome if you don't have a stable income. Do you have enormous savings to pay down payment, closing costs, and relocation expenditures? The more you are going to put down, the lower will be the mortgage rates. Your credit scores and the debt-to-income ratio have a pronounced impact on whether or not you will get approval for a mortgage. Lower DTI stipulates that you have been timely paying off your debts and loans.

Wrapping it up

Investing money in the real estate market at the wrong time can turn out to be an absolute nightmare that will spook you for the rest of your life. Don't rush yourself into buying a house this year just because the interest rates are attractive. You would probably end up penniless! Or perhaps you can work on your credit scores and have a close eye on the inventory to make a cost-effective deal next year.

Just in case you are open to buying a house right now, Honest Reviews 4 You is a credible hub that deals in offering a win-win situation, proffering a lucrative deal without any nuisance.

17 views0 comments