Should You Wait to Buy a Home?
Anyone in the market for a home will tell you that overall home prices just keep going up. Some people are even crossing their fingers that the economy will crash simply so that home prices drop in upcoming years. At first glance, this seems like it could give an economic downturn a silver lining: Property prices will fall, at least!
Unfortunately, this thought process is all wrong. Buyers shouldn’t base their purchasing power on their dream home’s overall price; there’s a better way to go about looking for your perfect property. Our knee-jerk reaction as buyers is often to steer clear of more expensive homes, even if we come across one that we really want. This is the wrong move to make! Should you wait to buy a home until a recession comes? Our answer is a resounding “No” because…
The Price of the Home Doesn’t Matter
Yes, we know it’s shocking. But we’ll say it again: The overall price of the home that a buyer is dreaming about does not matter. Unless, of course, the buyer is going to pay for the house upfront.
Buyers won’t be living with the price of the home every month. Instead, if you’re anything like the average home buyer in 2023, you are going to be paying a mortgage. Most buyers know that the first, second, or sometimes even third home that they buy will not be their forever home; they will merely act as stepping stones to the final homeownership goal.
That means that by the time first-time homeowners pack up and move on to the next house, they will only have lived in that house for an average of 7 to 10 years. This amount of time is nowhere near close enough to pay off the average mortgage of the home. So, no, buyers do not need an especially high income to buy a home.
So… What Price Does Matter?
The dollar amount that most buyers should be thinking about is the mortgage rate they are projected to pay on the home. This monthly payment should be compared to the buyer’s monthly debt payments and other expenses to calculate whether or not they are financially ready and capable of living in that home.
This doesn’t mean that buyers should forego their long-term goals of home ownership. Instead, they should accept that it is likely that with family planning, career changes, and the competitive market, they will more likely than not move three or four times while they search for their forever homes. When they find the home they would like to settle down in, before getting scared of a larger price tag than anticipated, get in touch with a real estate professional to calculate the mortgage of their dream home.
So instead of shopping for your dream home based on the price of the properties you are looking at, discover how much you can afford to buy a house for by calculating the monthly mortgage payments of your dream house. This is step #1 of how to become a homeowner.
Why Shouldn’t You Wait for the Economy to Crash to Buy a Home?
Should you wait to buy a home until the economy changes?
So many potential buyers are waiting for the economy to dip into the danger zone to begin shopping for a home.
Even if the economy does crash, interest rates will continue to rise. While the overall prices of the homes may lower, with high interest rates buyers will still be paying more on their monthly mortgage. So, overall, buyers will still be paying more for that home in a poor economy. Read more about homeownership during a recession.
If you’re still wondering about how to own a home, we would be happy to help you evaluate your purchasing power. Don’t hesitate to get in touch with our real estate professionals based in Space Coast, Florida. Feel free to peruse our local featured properties to get a feel for the area.