Realtors get this question all the time, “Is it a good time to buy a house? I am buying my first house and am not sure if it’s the right time.” When it comes to first time home buyer tips, this is the golden question: Should I buy my first home now?
This is a very important question which I feel realtors fumble most every time.
The simple answer is, it’s always a good time to buy a house if you are planning on living in it for 20 years and can afford the payments.
First Time Home Buyer Tips
There are very simple questions you have to ask yourself when considering to buy a house:
What’s your budget?
Be serious with yourself because the market is very high and if you cannot afford the payments, you will lose the house in the next recession. A recession is coming and it will happen whether you want it to or not.
Be conservative with your payments, you want your mortgage to be under 25% of your monthly income. Can you afford the payments for the next 20 years or so?
A recession will bring down the value of your home and therefore, if you try to sell it after only living in it for 5 years, you might find yourself at a loss on the investment. I believe a recession is coming in the next two years or so.
If you are stable and feel the payments work with your budget, then buy it.
But interest rates are so good now, right?
Yes, interest rates are at an all time low which is stabilizing the economy for now. The problem is, inventory is so low that prices continue to rise and affordability is becoming a big issue.
The only reason this matters, is because if you can afford the payments and plan on living in the home for the next 20 years, do it. The longer you stay in the home, the more equity you will build over time.
The market very quickly can take your equity in the next two years if I am right. I think home values will dip about 10-20% give or take which could turn your little equity, negative.
If your income shifts as well, you will not be able to sell your home which is terrifying to say the least. If you plan on living in it through the recession, 5-10 years later you will be able to sell it and probably make a profit on your purchase.
This is all centered around your goals. If you are fearful of the market or you are in a job that is dependent on the market, I would most likely rent for now and see what happens.
Trust your Gut
If you want to buy a home and can afford these prices, by all means, buy a house if it feels right. I’m telling you, a recession will come and I’m sure you feel it in your gut as well. If you are stable and looking to put some roots in the ground, buy the home!
I truly love homeownership because the independence it brings. You do not have a landlord breathing down your neck.
You are the homeowner and can choose to do what you wish with the property.
Is it Worth It?
As a first time home buyer you are going to want your dream home, remember you may not be able to get it. I would be willing to bet though, the home you buy now could make a great rental property later on.
If the home feels too overpriced and your gut is telling you not to buy it, pass and go to the next one. I promise there is always another one!
If you like my flips, feel free to reach out and see what inventory I have! I’m always happy to work directly with buyers and would be willing to work with you on price.