There have been many articles written on this subject. These articles argue both sides of this question. In an article Written by Dan Green titled Is Now a Good Time to Buy a House?[September 2023 Data] The opening two paragraphs are:
“If you’re a first-time home buyer, September 2023 is a good time to buy a house.
This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment. It highlights why 67 percent of renters would buy a home if their lease ended this month, and why the window to act is shrinking.”
He also believed that the mortgage rate have peaked. I am not certain that’s the case.
It is true that as of today (September 19,2023there are First-time home buyer programs available
He states there is a scarcity of homes on the market. If that were a reason for or against the rules of supply and demand would have me believe that more people trying to purchase the same item would drive the price up.
If you were to check in on the Freddie Mac Weekly Survey the 30 year fixed rate is 7.18% and the 15 year fixed rate mortgage is 6.51%. Although theses rate are higher than the 2.5% and 3% rates that were being offered a few years ago they are stable and in line with the predictions base on Americas sixty year monetary cycle. Which indicate that a person should be safe in purchasing a home today if they are able to make the payments. If you are considering purchasing a home and spending more than 31% of your monthly income to purchase it you may have difficulty finding a lending institution which is willing to take on that risk.
If you are considering purchasing property today you need to answer a few basic questions:
Why are you purchasing this property?
- For Yourself
- For your Business
- Investment. Reason
This article is geared to the personal purchasing of a home and further it is geared towards the first time home buyer. I believe that anytime you can afford to purchase a home for your family is the right time to buy. Purchasing a home is a long term commitment. A stable interest rate helps one to predict their mortgage payment. That makes it easier to determine your price range for looking. Also there are programs offered through Freddie Mac and Fanny Mae which lower mortgage rate in every state of America.
Look up:
- https://homebuyer.com/learn/homeready and its 3% down payment program.
- https://homebuyer.com/learn/home-possible and its 3% down payment program.
- https://homebuyer.com/learn/what-is-conventional-97 and its 3% down payment program
- .If you are a qualifying veteran then you also have resources to enable you to be able to purchase your first home.
NOTE: In some state a first time home owner is not necessarily someone who has never owned a home before. In California it someone that has owned a home in the last three years for the most part. But check with your local lending institutions to verify what the term means in your location. Notice I said lending institutions, not lending institution. It is wiser to allow multiple institutions bid for you patronage. Shop for the best deal. Also you must have credit score of 620 or higher to qualify for Conventional 97 Fannie Mae and Freddie Mac use the FICO credit scoring system. I believe it is Home Possible 660 or higher, Home Ready 620 or higher and FHA is 580 or higher. Again ask your lending institutions.
If you are considering purchasing your first home, the most important questions may be; can I afford to? Or Can I afford not to. When I began working in the industry I was amazed at the number of people who confided in me that they regretted not purchasing a property years ago. I will not tell you that everything about obtaining your first home is going to be easy. Most likely it will be a frustrating process:
- Bidding on a home you can imagine yourself in.
- Looking into the faces of friends and loved ones as you tell them you have found a home and have bid on it
- Making a simple error which allows another bidder to win the home
I am surprised each time a first time home buyer client of mine obtains the home of their first bid.
However to determine whether or not if now is the time to purchase your first home is dependent on the answers to so basic questions.
Are you ready, able, and willing to purchase your first property?
Two of these question can be answered easily, you know if you’re ready, and willing but I strongly advise you to look into your finances to see if you’re able. You know about your job security, about your lifestyle changes which may be ahead in the near future.
I find it odd that we teach children many things but not how to use the tool called money.
There are three steps I strongly advise you to make before purchasing a home:
- Determine the amount you will place into your emergency fund each month. Most advisers recommend between three and six months. I recommend a little higher because I recommend a long term and short term emergency fund. When you’re a renter if things break the landlord is responsible for fixing them. When you’re the owner, you’re the landlord and the responsibility is yours.
- Budget: Take note of where you spend your money. Once you start watching your spending you may find areas where you can easily save for these unexpected expenses.
- Decide where you’re going to keep you emergency funds. Banks are for profit organizations and Credit Union are nonprofit organizations. Adopting and achieving these three steps will make you home purchasing experience a happier one.
I truly believe that real estate is a great investment, but it involves work. I have heard it said that it is a good source of passive income. Real estate requires maintenance, if you’re a landlord and you do the repairs yourself they seem to never end. If you hire a management team then perhaps it become a source of passive income but for a first time home owner there are going to come unexpected expected expenses.
- The old item does work right in the new house.
- The colors of the walls need changing or is it the outside colors
- Something you owned does fit in the new house
- The carpeting is warn and needs replacing or for health reasons you must change it to tile or laminate flooring
You purchase a house it takes a little time and effort to make it your home.
You can plan on tax breaks for being a home owner. You can count on your fixed rate to remain constant while your income slowly increases. This allows you to use less and less of you income towards you mortgage payment as time goes on. However you must also plane for the effects of the “Time Value of Money”. This is about 8% each year. It is also why parking you money in a bank causes you to lose some its purchasing power. If the back gives you 2% interest on your money and the cost of living increases 8% then you’ve lost 6% purchasing power for what you have in the bank.
Image provided by Mike Mozart on Flickr
In my opinion whenever you can answer yes to the three question I mentioned earlier (Are you ready, able, and willing to purchase your first property?) it the right time for you to purchase a house.
The financial security gap between those who own a home and those who rent is widening.
Learn from other’s mistakes. Don’t become part of those with house purchasing regrets s.
Avoid becoming part group which regrets not purchasing their properties earlier in life.
There are a lot of statistics on this issue, but I caution you, there are three types of lies which punish:
- White Lies
- Dammed Lies
- And Statistics
Image by GarryKillian</a> on Freepik
Note: Images on this blog site are from a free source. No image or group of photos are intended to represent the people I serve. I don’t care about race (that is a politically correct term that I do not like because we are all of the same race, the human race. I prefer the term ethnicity), color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status. I am a service provider for all people. If we band together and help one another, we will all rise together. Joseph Erwin is a real Estate Broker, DRE O2131799 and a CA general contractor #B 696662 he’s a member of the CRMLS and The East Valley Association of Realtors
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