Nothing can compare to the pride of owning a home and having a place to call yours—a place you can customize to make all your home-owning dreams a reality. As the case may be, you have your down payment ready, and your credit report looks great, and a real estate agent available. You are ready to click “submit” on the mortgage pre-approval application, but then you ask yourself: is this the right time? Making a decision is easier than we think. Let us consider a few things.
To make our decision, we must consider the timing to know the best month and season to purchase, the economy and the job market, and finally, your finances and circumstances. These can guide our evaluation of the right time to buy a home.
The Best Month and Season to be a Home-owner.
During colder months like the fall in November and December to the winter through January to March, with fewer inventories, there is less competition, as few people seek to find a home. Also, sellers who want to list their homes may be highly motivated to sell, maybe due to a job relocation or transfer. This gives you the upper hand when negotiating and a higher chance of landing on a home you desire at the best flexible price. The only drawback for this time could be the weather,
Whereas when you seek a shopping experience with so many homes listed where the landscaping is easy to evaluate and have comprehensive inspections, you may buy during the warmer weather from spring from April to June. Around this time, it is easy to move when kids are out of school, as well as July to September when summer has set in, and kids are as well between school years, so moving will not disrupt their studies. The cons of this season are the stiff competition we may face and the hot temperatures, and less negotiating power.
In general, the best time is in the late summer or early fall when there is less competition and still a fair number of houses to choose from.
The Economy and the Job market
The Corona Virus created many stay at home orders, and massive layoffs destabilizing the economy. But for the intervention of Federal Reserves, interest rates dropped drastically, making the buyer’s market very attractive. Also, regarding social distancing, skilled Realtors can tour a house for you with 3D virtual tours allowing buyers to review many properties within a short time.
It makes it a perfect time for home buyers, particularly first-time buyers, to take advantage of the potential for a lower payment. Although supply exceeds demand, due to the pandemic, many potential buyers are sidelined by unemployment and tightened credit requirements making the market less competitive. Sellers in this economic crisis are forced to sell at huge discounts.
Personal Finances and Circumstances
We should finally assess if we are in a good financial position to own a home since buying a home makes us also liable for property taxes, insurance, maintenance, and repairs in addition to the mortgage. We may want to ensure we have enough money that can cover about six months’ cost of living, along with a stable income, after paying and closing costs on the mortgage.
Therefore depending on our risk appetite, these uncertain times are the best for first-time buyers as they wouldn’t have to worry about a home sale they have to make where the prices have fallen. So if we are starting a family soon and looking forward to building a relationship with a kid-friendly neighborhood and school, we must strike now while the ‘iron is still hot.’
Also, where the probability of relocation is less than three years, it may not be advisable to buy, but when the chances are you will move after three years or more, the gains and equity from home appreciation can often be enough to recoup the upfront cost of buying.
In a nutshell, the right time to buy a house is when we are financially prepared to do so with a stable job and income, and you find the right home at the right price. We may choose to wait, but we are not guaranteed better future market conditions as we have now. There are no crystal balls to predict when rates will rise or fall, so when we find a home we can afford, we should BUY it.