Housing

Is Now a Good Time to Buy a House?

Buying a home can have large ramifications for ones financial future.  Being able to buy at the bottom of a cycle can be very beneficial, whereas the top can be costly.  The only way to lessen the impact of these concerns is to come up with a reasonable budget to spend on the home.  If you spend the max amount a mortgage company approves you for, then the housing market prices can greatly affect your life both for the better and worse.  Purchasing a home well below the max approved loan amount will help to limit the magnitude it will have on your finances.

Important question to Ask

The only question you must ask is “Does this house serve my needs?”  Even better, “Am I excited to live here?”  If the answer is yes to both and it is in your budget, then it is hard to go wrong at this point.

In regards to the housing market if you purchase at the high of the market, but are not highly leveraged and can easily make your payments, then you are not affected.  Granted if the market drops heavily a few months after you buy, it will still be disappointing, but not life altering.

Fear of missing Out

Another concern people have is that if they don’t buy something now that they will miss out being able to buy ever.  i can’t guarantee that this won’t happen, but I think it is important to believe that if you save your money and make diversified investments that you will have an opportunity.  Even if home prices keep going up, if your stock, bond, and other investments go up too you can keep up to an extent.  With the leverage that mortgages allow it is possible that the home prices will still outpace your investment returns.  While this is a risk, it is better to take, than buying something you do not like.  Now consider the alternative if home prices substantially drop in price?  If you purchase something you only would be happy to live in for a few years, you may be forced to stay much longer than intended.  If you continued to rent instead you would have an easier time living somewhere else if desired

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