Is Now the Right Time to Buy a Home?
Right now, there is considerable debate concerning whether or not now is the right time to buy a home. I bought a new home last year, since the timing was right for my family. If the timing is right for your situation, you might consider now a good time to buy a home. CNN Money offers this encouraging view of the housing market:
“Homes became more affordable because median income and interest rates remained about the same throughout the country, as home prices continued to fall,” said Gopal Ahluwalia, an NAHB economist.
With home prices down, and a supply of homes on the market, you are more likely to find a good deal. On top of that, you can get an interest free loan for part of the home in the form of a tax credit — if you are a first-time homebuyer.
Despite the benefits listed above that can come when you buy a home now, many people are hesitating. The two main reasons for this hesitation include:
- Trying to time the housing market. In this scenario, some would-be homebuyers try to wait until the bottom, when home prices are their lowest. They try to time it so they buy at the trough. The problem with trying to time the housing market is that it is very difficult to do — the chances of you doing this successfully are very slim. Conditions are good right now; even if they get better, they won’t be that much better.
- Worries that home prices will continue to decline. The problem with this thinking is that it view home ownership as an investment, rather than a purchase. Also, it discounts the idea that over time real estate generally appreciates in value. If you plan to stay where you are at for at least five to seven years, chances are that home prices will be rising when you decide to sell. If you are looking to sell in less than five years, than maybe now is not the right time to buy a home, since it could take a while for this down cycle to sort itself out.
Overall, if you want to buy a home that your family can stay in for a while, now is a pretty good time to do it. Home prices are lower than they have been in a long time, and mortgage rates aren’t very high.
Tags: buy a home, right time buy home, home mortgage loan, tax credit,
mortgage loan blog, home prices
