Is Now the Right Time to Buy a New House?
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. Further reading on
Why now may be the best time to buy a house!