3 Questions You Need To Ask Before Buying A Home
If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.
Ask yourself the following three questions to help determine if now is a good time for you to buy in today’s market.
1. Why am I buying a home in the first place?
This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.
For example, a study by realtor.com found that “73% said buying in a good school district was “important” in their search.”
This report supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. The actual reasons are:
- A good place to raise children and provide them with a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.
2. Where are home values headed?
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in February (the latest data available) was $249,500. This is up 3.6% from last year. The increase also marks the 84th consecutive month with year-over-year gains.
Looking at home prices year over year, CoreLogic is forecasting an increase of 4.6%. In other words, a home that costs you $250,000 today will cost you an additional $11,500 if you wait until next year to buy it.
What does that mean to you?
Simply put, with prices increasing, it may cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.
3. Where are mortgage interest rates headed?
A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.
Freddie Mac, Fannie Mae, the Mortgage Bankers Association and NAR have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:
Bottom Line
Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.
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I believe that asking myself why I am buying a home for sale is a rather important question that I am now able to answer. Thanks for clarifying that I should know where home values are headed so I can save money while buying a home. As long as the mortgage interests are favorable to my condition, I know that I should have no problems with buying a home from a real estate company. https://karlmillerteam.com/lynchburg-homes-for-sale/
You made a great point when you said that you should determine if you are buying a home to provide a good place to raise children or to have more control of your own space. My wife and I are expecting our second child, so we want to move out of our apartment and into a house. It would be great if we could find a website that provides a wide variety of homes for us to look at and decide which is best for our needs. http://www.hensleyrealtycompany.com/about
It’s great that this article explains how it’s important to consider why you’re purchasing a home, such as finances or if you need more space. Knowing this would be useful so you can figure out your requirements. If you know your requirements, it would make it easier as you go online to check out property for sale so you can find one that fits your needs.
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I appreciate your tips for buying a home. I like how you said that buying one for our kids is a good reason to buy one. Now that we’re planning on having our second kid, I think it’s smart to have more space. http://www.mollyeovino.com/Pages/Naples.aspx
I think I’ve asked my brother why he wants to buy a home for sale in the first place so I’m trying to help him find one. Thanks for adding that before I contact any real estate companies, I should know where the home values are headed so he can afford to live in one before he lands on his next job to the state he wants to live in. This way, he’ll also be able to save money if the mortgage rates are headed to prices in his favor. https://www.talk-to-tanya.com/