It’s a hard question to answer, but your best friend in home finance is here to help! We’ll cut through the confusion together to figure out if it really is worth buying a house right now. First, let’s take a look at the market itself.
What factors are affecting the housing market?
- Rent prices are increasing quickly
- The housing market is starting to cool off
- Inventory is slightly improved over 2021, but it’s still not great
- New house construction is slowly rising
- Interest rates are on the rise and are expected to go higher
- Credit card debt is increasing toward an all-time high
The JPAL Mortgage Analysis
- Unaffordable rent is pushing people into purchasing and they’re finding slightly better inventory than before.
- As home prices are near record highs, increased interest rates have forced homebuyers to rethink how much home they can afford
- Home prices are starting to fall
- Inflation is causing credit card debt to increase, which is causing credit score to lower and increasing debt-to-income levels for homebuyers. This is pushing some houses out of reach due to debt load.
It it worth buying a house now?
Mortgage rates are going to continue to increase for the foreseeable near future. Purchasing a home how could lock you into a lower rate than you’d find heading into 2023. This is a win/win for you – if rates come down, you can refinance to save on your monthly payment. If they continue to rise, you’ll have a rate that will make others jealous.
Rising rates are causing homes to sell slower. This will give you an opportunity to find the right house for your needs. The days of a home receiving fifteen cash offers over asking price are in the rearview mirror. That’s not to say it’s easy out there – but it’s easier than it was three months ago.
If you’re renting, now is the perfect time to purchase. We believe rent will continue to increase as affordable new apartment builds are few and far between. This will keep demand strong, and that means higher rent prices.
Yes, it is definitely worth buying a house right now!
What should I consider as I think about buying a house?
Debt levels and credit worthiness are potential problems. Don’t take out more debt than you must, including credit cards. If your debt-to-income is too high, you might push yourself out of the market.
Save money! Closing costs and down payments cost more than you think. You’ll also want money in reserve once you’ve moved into your new home. Home repairs and upkeep cost about $3,000 a year. Your new home won’t be comfortable if the A/C, furnace, or water heater go kaput and you can’t afford a replacement.
Take your time and find the right house. It may be tempting to jump on the first house that comes your way, but don’t overcommit. Since inventory is increasing and sales are slowing down, you have more power as a homebuyer. Put an inspection clause into your contract. Don’t overlook the fact that the home might need tens of thousands of dollars in renovations to become what you want.
Find a great realtor! A good realtor will take the time to answer your questions, understands the loan underwriting process, and has your best interests at heart. Patience is key in this process, and you want someone who understands that.
Set yourself up for success with a pre-approval!
You won’t go anywhere without a pre-approval. Selling realtors want to know you’re serious and they want to know you stand a reasonable chance getting through the purchase. In a realtor’s eyes, home buying without a pre-approval is window shopping.
JPAL Mortgage can help you get pre-approved! We’d love to talk and put together a personalized mortgage plan that fits your needs. We can answer questions about the process and recommend some fantastic realtors. JPAL Mortgage is your best friend home finance! Contact us today!
JPAL Mortgage is a licensed mortgage broker. NMLS# 2189752. All loans are subject to credit and property approval.