There has been a lot of coverage this past year around the housing market and current mortgage rates. While we’ve seen some unprecedented spikes in the housing market this year, there has been a lot of discussion around whether it’s the right time to buy a house.
Buying a home is a major life event and needs to be approached strategically to ensure you’re getting the most value possible out of the purchase. For this article, we’ll take a closer look at the housing market and the various factors to consider when deciding to buy a house.
One of the biggest considerations during the homebuying process is mortgage rates. A competitive rate can make all the difference, and it’s a significant commitment to make.
The good news is, current mortgage rates have been at historic lows since the pandemic, which has fuelled buying activities. Moreover, mortgage rates are projected to stay low for the rest of the year, making it an ideal time to think about buying a house if that was a major factor in the decision.
One of the effects of low mortgage rates is that housing demand skyrockets – which is exactly what has happened in this case. As a result, there are more buyers on the market than there is housing inventory as people try to snap up homes with low mortgage rates in place. That has meant that currently, there is far more inventory than demand, and it has driven up housing prices in general.
House sales are also closing at faster rates than before, with buyers having to pay above asking price to have their offer considered. So while it might be a good time to buy a house from a mortgage standpoint, the current demand means that you might pay more than usual due to demand.
So with the previous two factors in mind, the main aspect to consider is budget. A mortgage is a long-term commitment and can be a source of stress for many if the homebuying process is costlier than anticipated.
So before you start the homebuying process, think about your financial limits and what you are willing to pay premiums for (i.e., a good location, good schools, etc.). Knowing what you value and what you don’t will be helpful during the househunting process to ensure you don’t get caught up in the pressure and make hasty decisions that might end up hurting your budget.
You can also look at financing options such as home loans before starting the home buying process to understand the different types of mortgages and conventional home loans that can help with the process. If you’d like to learn more, you can find resources here to help you with the homebuying process. The more research you can do beforehand, the easier it will be to make decisions when the time comes to make an offer. And if you’re clear on financing options and your budgetary limits, you can make competitive offers without putting additional strain on finances.
So when it comes to whether it’s a good time to buy a house, the honest answer is that it’s a very individual decision. If you have enough budget to cover higher prices due to a competitive market, the low mortgage rates make it an attractive time to buy a house. On the other hand, if financing options and budget is limited, it might be better to hold off for the short-term and see how the housing market shifts.
Hartford Funding is dedicated to helping you on the path to successful homeownership. We offer user-friendly technology and professional guidance to help make homeownership easy and smooth. Our Loan Consultants are experienced professionals that are happy to help you during the home buying process, so get in touch today to learn more about our services!