It seems like every piece of real estate content these days is either telling you it’s a great time to buy a house or it’s a terrible time to buy a house. There’s no in-between. No nuanced takes. Just a definitive yes or no for everybody. It’s always some hot young content creator or old stodgy business person telling you what to do, and they deliver this message with such absolutism that it’s impossible to decipher what is actually happening out there and how it applies to you personally. “Should I buy a home right now” is not a one-size-fits all question. Some people should. Some people should not.
Let’s dive into three things that you can do right now, today, to figure out which category you fit into.
First - you should talk to a Realtor. Yes I understand that me leading with this point, as a Realtor myself, feels a little self-serving. But it’s the truth, and advice is free. People in your world keep telling you that this market is challenging. And they’re not wrong. But “challenging” is not the same thing as “impossible” and your trusted Realtor, ideally me but whomever, is living in this market every single day. We pay attention to the market as if it’s our favorite team in the World Series or our favorite band on the stage. We can see changes coming before they happen because we are so in tune with the market, and this is the knowledge you need as you begin your journey. We can also give an idea of how realistic your budget is for your perfect home in your desired area, as we set expectations for you on what your home purchase journey will look like. I always wonder how people can decide whether or not buying a home makes sense for them if they don’t speak to a professional about the market. Making this decision without speaking to a Realtor directly is like diagnosing a serious medical condition on WebMD.
Second - Talk to a mortgage lender. If you followed step one, your Realtor probably has several mortgage lenders they trust that they can refer you to. Affordability seems to be the biggest thing keeping people out of the market right now. And that’s not a claim they make without merit. Interest rates on average are hovering around 8% right now, and that destroys a lot of people’s budgets. It feels especially terrible when you look back to just two years ago when you could have had an interest rate in the 2.0%-4.0% range. And because this area is so difficult, it’s the one that’s most important to talk about in making your decision. Especially since mortgage lenders have lots of strategies to get around this very issue. There are what we call “buy down” programs where your interest can be pre-paid for a few years at closing. You can refinance your loan over time to get a more palatable interest rate. You can look into down payment grants and assistance programs which don’t impact your rate directly but do help you keep cash on hand so you can absorb the high payments before you do refinance. It’s possible that investigating this path leads to the realization that purchasing property doesn’t make sense for you. But it’s also possible that you realize you can. Only way to know is to talk to someone and find out.
Third - Start saving for your down payment. Even if it turns out you have access to the grants or down payment assistance programs I referenced above, putting money aside for a larger down payment or to pay extra principal on your mortgage payment every month never hurts. And with those interest rates where they are right now, the less you can manage to finance, the better.
This list could honestly be hundreds of items long, but my purpose today was to communicate two things. One, go directly to local experts for your guidance and two, what can I do RIGHT NOW to get started.