Real estate experts point out that home purchases should be driven first and foremost by your life situation, not by what is happening in the economy or in the local real estate market. They suggest that if you’re thinking about buying a home, you should ask yourself these two questions:
- Is my financial position stable—including having the money for a down payment, as well as enough savings to get me through an unforeseen financial disruption?
- Do I plan to be in the home I’m looking to purchase for at least the next 3-5 years?
Housing experts say that if you answered “yes” to both these questions, then buying a home now makes perfect sense. If, however, you answered “no” to either of the questions, then you should think about waiting until the answer to both questions is “yes.”
That’s because the right time to buy a home is when your life situation merits purchasing. You want to be in a stable financial position, with enough money for a down payment and to cover a financial setback if one occurs. Plus, you want to see yourself staying for a while in the home you’re buying. Home prices may go up or down in a one- or two-year period, but when you stay in a home for at least three to five years, there are clear benefits to home ownership.
The fact is, the time you spend in the market as an owner is far more important than getting caught up in trying to time the market. Over the long term, homeownership always wins versus renting. During the past 30 years, the average increase in home values nationwide was more than 289%!
The outlook going forward. The past few years have been challenging for many buyers. They often faced multiple offers, increasing prices, and fewer homes on the market to choose from. Fortunately, the situation seems to be improving in local markets across the country, and many buyers are finding conditions more accommodating. At the same time, home values should continue to increase over the long term, as history shows.
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