Only you and your family will know if it is the right time to buy a home. Here are three questions you should ask yourself before making a decision.
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If you’re looking to buy a home right now, you’re probably getting all kinds of advice from your friends and family. However, they might not be aware of your needs and what’s actually happening in today’s marketplace. Luckily, there are three questions that will help you determine whether now is actually a good time to buy in today’s market.
1. Why are you buying a home in the first place? Forget finances for a minute and just think about why you began considering purchasing a home in the first place. For most people, the reason has nothing to do with money. What does owning a home actually mean to you? Which non-financial benefits will you and your family gain from actually owning a home?
There are four main reasons that people own a home. First and foremost, you need a safe place to live. If you’re moving to Alaska, you’ve probably figured out that the rental market can be a little tight. If you’re looking to find safe and affordable housing, buying may be your best option.
Another reason to own a home would be to have a place to raise your children. School districts can be very important to buyers with kids.
You also might need more space for you and your family or you might want control of your space. I was in the military, so I had the option of being in post quarters. I wanted to be off-post with an acre of land. You can have all the space you want if you buy a home.
The fourth reason comes down to what makes financial sense for you. Rental rates in Alaska are high right now, so if you’re going to live in the house for three years or more, buying a home will be a much better option for you than renting.
2. Where are home values headed? CoreLogic projected a 5.3% increase in home values over the next 12 months across the nation. Based on that information, if you’re planning on buying a home that costs $250,000 today, that home will cost you an additional $13,250 if you wait until next year. You will also need a higher down payment to account for that increased home price. Timing is everything in real estate, so be sure to buy while home values are on the upswing.
3. Where are mortgage interest rates headed? As you know, the long-term cost of a home can be dramatically affected by interest rates. Interest rates are going to go up, but we don’t know when. The Mortgage Bankers Association, National Association of Realtors, Fannie Mae, and Freddie Mac have all projected that interest rates will increase over the next 12 months, so it’s fairly likely that interest rates will go up soon.
Only you and your family will know for sure whether now is the right time to buy a home. Answering these three questions will help you make that decision. If you have any other questions, give us a call or send us an email. My team and I would be happy to help you!