Can You Afford to Stop Renting and Buy This Year? Maybe.
Prospective homeowners who put in a lot of effort and saved up money over the last year may be disappointed to realize that it is still challenging to purchase a house at an affordable price this year.
The path to becoming a homeowner is now more difficult and costly, but there is some encouraging news. The median price of a house is still far more than $400,000, despite the fact that prices dropped by $15,000 in August.
The rise in the number of active listings in July reached a record high, which may be an indication that the housing market is moving toward rebalancing, which is something that we haven’t seen since the COVID-19 outbreak created a seller’s market. In July, the number of active listings reached a record high.
Before giving up and biding your time waiting for rent relief, we have some tips for you you that we hope you will find helpful.
Buy a Smaller Home
Despite the fact that you shouldn’t buy a home for the sake of owning one, you should be flexible in terms of the kind of home you choose. A starter house often has fewer rooms, fewer bathrooms, and cheaper fixtures and appliances. You will start to accumulate equity in the home if you expect to stay there for more than five years. The money you’ve saved will come in handy when it comes time to buy a house that has everything on your list of “wants.”
Be Prepared to Negotiate
Properties that had previously been purchased almost immediately after they were listed on the market are now selling at a slower rate than in the past. If you’re looking for a good deal, this could be your best chance of making an offer that’s lower than the asking price.
Save and Wait Some More
If you’ve waited this long to buy a home, you may want to think about postponing your purchase for a little longer to give the housing market more time to recover completely. Even though there are a lot less individuals looking to purchase compared to the previous several years, there are still a lot of sellers out there who are motivated and want to sell their homes soon.
While you wait to buy, you don’t want to stop saving your money! The more you can save for a down payment, the loan amount will be lower, thus improving the chance of being getting approved for the mortgage. This results in cheaper monthly mortgage payments, and if you can make a down payment equal to or more than 20% of the property’s value, you are exempt from having to pay for private mortgage insurance.
Have a Pre-Approval Letter
Even in a hot property market, if you find a real estate agent who doesn’t advise you to obtain pre-approved for a mortgage, you do not want to hire them. Any agent worth their salt will insist that you get a pre-approval letter. This letter will define your budget, meaning you know exactly what you can spend, and sellers realize that you have the cash to follow through.
When the economy is shaky, it’s natural to feel reluctant about significant decisions like purchasing a home. Inflation is outpacing salary growth. Everything seems to be becoming more costly, and the dollar doesn’t go as far.
Life must continue on, and all anyone can do is prepare.