Jun 5 2022 38376 1

Dated: June 5 2022

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Is Now the Right Time to Buy? 12 Factors to Consider

The real estate market is booming and many buyers are looking for a new home. One key reason the housing market is prospering is low mortgage rates. But there are other factors would-be homeowners need to consider when deciding whether now is a good time to buy.

1. Consider Population Growth

When considering an investment property, look at the fundamentals like population growth. When people are moving to an area in droves, the demand is high and we have a healthy market for buyers to find the right properties and get involved.

2. Look at Rent Projections

People who are interested in buying a home as an investment property should look at rent projections in the area. Properties may be hard to make profitable today, but if rental rates are projected to climb, the property stands to become profitable over time. If the property is in good shape, lock in the low mortgage rate now and be diligent about raising rents as the market supports it.

3. Don't Wait For the 'Perfect Time'

When mortgage rates go up, the price of housing eases. It is very hard to plan the perfect time to buy. If buyers are waiting for prices to decline or for a market correction, they may be facing higher interest rates. If a prospective buyer needs housing, they should buy when they would like to. A large part of homeownership is intrinsic and not financially driven.

4. Examine the Timeframe

In nearly every market, real estate is a great long-term investment. The biggest consideration for buyers, aside from basic affordability, is the timeframe for their investment. If you are thinking of selling in fewer than five years, you are taking a serious risk of losing equity. If your time horizon is 10 or more years, your chances of substantial value appreciation are greatly increased.

5. Project Future Job Stability

For most families, job stability should be the main consideration when thinking about buying a home. Careers primarily dictate which area a family lives in and for how long. It's a cliché, but it really is about time in the market, not timing the market. Despite some highs and lows, the real estate market has gone up over a long enough period of time.

6. Consider the Primary Motivation

When debating on whether now is a good time to buy, it's important to consider not only mortgage rates but also what the primary motivation for moving is. In strong seller's markets, it's important to be prepared to act quickly, have your finances in order and be clear on what your needs and wants are. Your level of preparedness will help you navigate the competitive market

7. Watch the Market

Right now it comes down to a buyer's personal risk tolerance. In such a competitive market, buyers are writing offers over the asking price, putting more money down and even waiving contingencies. Those are all great strategies, but buyers shouldn't feel trapped into doing them. If they aren't comfortable, they should keep watching the market so they're ready when it begins to cool.

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