3 Questions to Ask Before You Buy Your Dream Home
If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will 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 3 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 survey by Braun showed that over 75% of parents say, “their child’s education is an important part of the search for a new home.”
This survey 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. They are:
- A good place to raise children and for them to get 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.
3 Questions to Ask Before You Buy Your Dream Home
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 May (the latest data available) was $252,800, which is up 5.8% from last year. This increase also marks the 63rd consecutive month with year-over-year gains.
If we look at home prices year over year, CoreLogic is forecasting an increase of 5.3% over the next twelve months. In other words, a home that costs you $250,000 today will cost you an additional $13,250 if you wait until next year to buy it.
What does that mean to you?
Simply put, with prices increasing each month, it might 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.
The Mortgage Bankers Association (MBA), NAR, and Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:
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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Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home.
The outlook for 2017 remains positive as well, as an additional 600 thousand properties will regain equity if home prices rise another 5% this year.
Selling your home is a matter of competition in today’s real estate. You’re competing with other like minded sellers all fighting for the right offer at the right from an eager buyer.
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California Prop 60 and Prop 90 Property Tax Transfer Rates
Home Buyer Demand Continues To Outpace Homes For Sale. The price of any item is determined by the supply of that item, as well as the market demand.
Inventory Drops Again, Sales Slow. Inventory of existing homes for sale dropped to a 4.3-month supply, marking the 25th month in a row of declines.
Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.
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