Is It Better to Buy a Home Now or Should I Wait?

You've likely heard how "tight" the market is right now. While there are fewer homes available for buyers, home sale prices are likely going to continue to rise as well as interest rates. Plus, all indicators show that our population here in the DFW area is going to continue to grow rapidly, so there will be more competition for homes in the day ahead.

Here are a few factors to consider when determining if it's better to start the home buying process now or wait:

1. Consider Timing and Circumstances of Your Current Living Situation

Thinking through your current living situation is another huge part of determining if now is the best time to buy a home or if you should wait. Are you coming up on a lease renewal and seeing what the price increase is creates panic? We may be able to find a home for you to buy that could create a lower monthly payment than the rent your paying, and you are getting to put cash back in your pocket versus paying someone else's mortgage! Check out my blog on why "Owning is More Affordable than Renting in the Majority of the Country" for more information on this if you're a current renter!

On the other hand, if you still have a year left on your lease and the cost of breaking the lease far outweighs the benefits, it may be better to hang tight for a few more months and start your house hunt 4-6 months before your lease ends. Looking to sell your current home and move into a new home? Let's chat through a contingent purchase or even look to get your home listed soon so you can make top dollar to be able to invest more into your next home purchase! I would love to chat through your current living situation with you to help determine what timing would be the best for you!

2. Savings Timeline

A second factor to consider is your savings timeline. If you've considered waiting to buy a home, will you be able to save enough money between now and the time you're looking to buy to outweigh the expected price of a home's appreciation + interest rate increase (that will affect your monthly payment)?

Home Appreciation - While unfortunately no one has a crystal ball to see what home appreciation will be in 2022, based on supply and demand factors we're expecting to see anywhere in the 10-20% appreciation on average this year (more on that in this article). For a home worth $300,000 today, we could be looking at that same home being worth anywhere from $330,000 - $360,000 in just 12 months.

Interest Rate Increase - For every 1% of interest rate increase, your spending power decreases by around 10%. Here is an example of what a buyer's purchasing power looks like at different home loan amounts v. a 30 year fixed mortgage rate. To read more about the projection of where interest rates are headed, check out my blog about it here.

3. Have you been pre-approved?

If you have already connected with a lender and have a pre-approval letter in hand that showcases that you can purchase a home, then you are right on track! If you haven't been pre-approved by a lender yet, this should be one of the first steps you take to determine if now is the best time to buy a home or if it'd be better for your financial situation to hold off for a bit as it will help determine if you are able to qualify for a mortgage loan. Your lender is going to talk through what your long-term financial goals are, where you are at currently with savings and income, plus what your credit history looks like and other background information that may affect your ability to purchase a home. After the initial conversation and pre-approval process, we will be able to game plan the best timeframe for you to start your house hunt (whether that's today or in 3 years from now!). I'd love to connect you with our team's preferred lender, Benchmark Mortgage, to have the pre-approval conversation if you haven't already taken that step and are ready to do so!

Bottom Line:

Deciding if now is the best time to buy a new home depends on a variety of factors - your current/future living situation, savings timeline, and lending qualification to name a few. I'd love to talk with you whether now is a better time to buy a home if you are considering whether to act now or wait.