This is a tough question I get asked all the time, whether it is in this market, the market 6 months ago, or 15 years ago during the Great Recession.  The question remains the same.  Should I buy a home now or wait?

There are a lot of factors that go into this important decision, such as, are you an expanding family and need more room, are you downsizing, or are you tired of paying rent?  People will try to time the market for buying a home, and will try to buy when the prices and interest rates are low.  But, like stocks, it is tough to time the market.   With stocks, you may purchase a stock thinking that you bought it at the right time, but then the price goes down after you buy it.  Then, you are stuck in that stock hoping for the price to go back up so you can make a profit.  If you purchased the stock for the right reasons, such as the fundamentals of the company are strong, it pays a good dividend, or the company is in a strong sector of the market, then the despair of the sudden drop in the price is tempered as the purchase was based on strong analysis with results over the long term.  Similarly, it is difficult to time the purchase of a home.  If the property is right for you, the quality of the home is solid, the neighborhood is strong, and the home fits your needs, then it may be the time to purchase the home now and negotiate the best price you can.  One constant in real estate is that it is cyclical, consisting of peaks and valleys, with prices fluctuating over time.  The longer you stay in the home, the better the chance you will see appreciation in the value of your property.  So, although price is very important, consider the other factors discussed above when it comes to purchasing a home.

You may say that interest rates are high today making it prohibitive to buy.  Let’s take a look.  A $500,000 loan at 7% 30-year fixed interest rate today is $3,326.51 per month.  Adding estimates for taxes and insurance, the monthly payment would be approx $3,700 per month.  A quick Zillow search of similar properties for rent shows that this monthly mortgage payment is not far off from the current rents being charged depending on the location.  With a purchase, part of your monthly mortgage payment goes to the equity in the home and is paid to you, rather than rent which does not go to you.

Many Loan Officers are stating on social media that you can refinance later when the rates come down.  Although this is true, and we are hopeful this time will come, the fact  is that no one knows when, and if, this time will come.  So, it is important that you are comfortable with your current payment at the current rates as you may be at this payment for a while.

Do you need help analyzing whether you should purchase now?  Give me a call and I can help.  I work for you, not the lender.