When is it truly a good time to buy a home?

Question

My husband and I have been talking about buying a home for a few months now since we are both financially stable and have a baby on the way. We figure that we will need more space as she gets older and/ or as our family grows. We have looked around in different parts of town and have found a few homes that interest us within our price range but my husband says to keep putting it off until we have more money saved since the market is going to get better. I don't mind living in an apartment at all since I have mostly my whole life, but at the same time I keep thinking about my daughter and how nice it would be to have her grow up in a house just like my husband and I both did. Maybe I am just getting impatient but I feel we have more than enough money saved to do this. I know that he is just concerned that we might be on a tight budget once we buy a home... any advice or anyone who has been in a similar situation?

Answer 1

obviously I don't know any specifics about you and your family, but I think a lot of young people find themselves in your situation

generally, the best time to buy a home is NOW. What I mean is that if you compare the economics to buying now compared to waiting a year, it almost always works out that being in sooner is better financially. You have an additional year for building equity.

The way that equity increases (I am assuming that you buy in a nice area with good schools where home values will slowly appreciate) is as a per centage of the home's value, whereas adding to your savings only increases by the amount that you can save

Let's say you buy a house worth 200K by putting down a 10K down payment. If you waited a year you could have 15K for your down payment and afford a bigger house. But in the meantime somebody else who bought the house with 10K down has a year of appreciation. Let's say the house went up 5%. That is 5% of 200K though! That is 10K, so you have twice as much growth as the person who waits. That sort of thing is the typical way the situation would work out, again assuming that you buy wisely in a nice neighborhood.

at least start looking seriously, listing positives and negatives of different houses and even different neighborhoods

don't get too hung up on the negatives, every house has some, either you wish the yard were bigger, or you are too far from work, or the kitchen is ugly or whatever

keep in mind that some things can be changed and some can't, like you can update your kitchen when your income grows, but you are never going to be able to pick up the house and plop it into a better school district. You can do landscaping and painting yourselves, little by little, so try to look past that stuff if you can (some people can't, they can only see a house as it is now, that is why people make money flipping houses)

your baby probably doesn't know that he lives in an apartment, so you have time to work on this & you will probably realize that the house you really want might have to be your second or even third house, not the first one, but the sooner you are in your first house, the sooner you will be in your second house

Answer 2

Right now yes it is a buyers market, but the prices have not stopped dropping yet, because the influx of foreclosures have not hit full force yet, it is just now hitting the Alt-A consumers so many more homes will be coming on the market, with even less potential buyers. When that happens the price will deteriorate even more, thus vanquishing any equity you would have if you purchased today. Rumer is the Feds will be dropping the prime rate in September but if credit remains tight it will not really help that much accept to possibly stop the bleeding in the mortgage market. I would watch the markets and be patient, this is only the beginning.

Answer 3

Personally I think the market is lousy now (at least where I live) and will continue to be lousy for years to come. Nonetheless owning a home is a great tax break (the interest on the mortgage is tax deductible) so even given that the market is lousy I'd still prefer buying a place to renting (I think even in a bad market owning will make you money because of the tax break).

So, I'd just say go ahead and buy one as soon as you can swing it. The ony reason to rent (in my opinion) is when the market is due for a fall (it may fall further - but who knows) or if you plan to move within a few years anyhow.

Answer 4

my hubby was like this too untill he finally took the step and got us financed for our home and yes it is a good time to buy a home right now cause sellers are desperate to get out from under their homes and move some where to retire . so yeah I would say try taking him around and looking at houses and if you guys see one you really like you had better jump on it . our house was on the market only a month untill we closed we learned a long time ago you find a house you want you had better get it cause someone else will . good luck .

Answer 5

let me say that is a nice feeling to buy a house and ave your kids grow up inone and play n the back yard ..i live ina house recenlty bought one a bout a year ago in New York..but i am loking to live NY and go somewhere surburb neighborhood.....i am tired of city life....so i am loking into that...plus i have lived in a house since i was like 18 and i dont think i could go back to living in an apartment building...i think you should buy...contiune looking even if the market is not so great..it takes time and youjust might find something that you truly love...so contiune lookign until you find your perfect home...rememebr dont settle..if you dont like it dont buy it..it if does nto have what you want in it..dont buy it.....
right now the house i have is beautiful onthe outside..and i have 2 bed 2 bath living area dinning area...small kitchen..but the cabinets are great...
what i want now is open kitchen with marble counter top..cabinets that go all around ..like my house now....