When trying to decide if you want to move or buy a new home, you might be wondering what you should consider in order to make a good decision. Does the time of year matter? Do interest rates matter? How does a credit score affect the homebuying process? All of these things play a role, but are they the end-all-be-all? Let's investigate and find out.
So, when is the best time to buy a house? The answer includes a few parts: the time of year, the housing market, and your own personal situation.
The time of year can have some effect on the homes that are available to choose from. Many people choose to move during the spring and summer so they can have their children settled in a new home before the start of a new school year. Because of this, there will be more homes on the market between March and July making that a good time to look for a new home as you have more selection. However, you also have more competition because this is when many other people are looking to move as well, and that can impact the listing price which would have a negative impact on timing.
Moving during the fall and winter has its up and downsides as well. The upside is less competition which can cause prices to decline a bit, but there are still fewer homes to choose from. And, moving during the cold and winter isn't the most ideal either.
The second point of this discussion are interest rates. Mortgage rates were historically low in 2021, and some experts think the rates will continue to go up and some think they will go down a bit but we will likely not see the low-interest rates we did this last year. Keeping mortgage rates in mind as you decide is important as it affects your buying power. The higher the interest rate, the less home you can afford. There is also competition among buyers because there isn't enough home inventory currently available. Most homes are selling relatively quickly and coupled with low home inventory and that tends to push home prices higher. Since 2020, home prices have been climbing and it is likely that trend will continue.
If you are trying to decide when it's the right time to purchase a new home then also consider your financial preparedness. If you are not financially prepared, it is not a good time to buy. You will need a down payment, so do you have money saved for that? The more money you have to put down the lower your monthly payment will be. You should also know your credit score. Some lenders can issue loans if your credit score is in the 600s but a credit score of around 740 will help you qualify for better interest rates. Lenders will also consider your debt-to-income ratio, DTI. You will want to ensure you have paid off what you can so your DTI is under approximately 36%. Also, consider your employment situation. Is your job secure enough to support a mortgage? A secure and steady income helps determine if you can continuously make the monthly payment each month. Lastly, what is your personal situation? Does this align with your personal needs and plans for your future? If so, this may be the right time to buy a new home.
The bottom line is that most people are looking for the right balance in all of these factors. I would suggest talking to a lender to determine where you fit for your buy-ability, then look for homes that fall into your price range and see if you find something that aligns with your personal situation. Interest rates are always adjusting and historically speaking, we still have good rates. If the rates go down, refinancing is always an option, but you don't want to wait for rates to go up. Make sure to consider a new construction home when trying to decide if this is the right time to buy. Celebrity Homes prides itself on being the best value in a new home. Purchasing a new home with new windows, roofing, heating, and air components will likely save you money over the long term in comparison to an existing home that already has some years of use on its components. Every situation is different so you have to weigh your options. Make sure to add a new construction home by Celebrity Homes to the scale when considering your new home possibilities.
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