Studying The Housing Market Before Buying a Home
Buying your first home is a big step. As a first-time home buyer, it’s important to do your due diligence to ensure that you get the house you want for a fair price.
Going into the market blind is a mistake. As a first time buyer, it can be easy for sellers and agents to take advantage of you.
One thing that you can do to prepare is to study the housing market. The real estate market is constantly changing. House prices rise and fall as do mortgage rates.
Understanding the current state of the housing market will help you determine how much you should be paying for your home, what mortgage rates you can expect, and whether or not now is a good time to buy.
Let’s look at a few reasons you should be sure to study the housing market before buying your first home.
Determine Fair Value
One of the most important things to do before buying a home is evaluating how much you should pay for a home in your area.
Studying the current housing market will help you get a good idea of how much homes that meet your criteria are going for. This will help make sure you pay more than you need to for your ideal house.
One useful tool you can use to determine fair value is real estate comps. Using comps simply means to compare the home you want to purchase to comparable properties in your area.
This includes taking factors like size, amenities, locations, number of bedrooms and baths, and more into consideration.
Using real estate comps will ensure that you know how much your ideal home is worth in the current housing market.
Like housing prices, mortgage rates are constantly changing.
As the economy changes, inflation occurs, and other factors come into play, mortgage rates can go up and down.
If you’re like most people, you probably don’t have the money to pay for a house in cash. As a result, you’ll have to take out a mortgage to purchase a home. If mortgage rates are high when you enter the market, you could end up paying thousands of dollars more over the years than you would if you waited for rates to fall.
Interest rates are one of the most important factors when determining whether or not you can afford a loan. If mortgage rates are higher than normal, it might be a good idea to wait a while before purchasing a home.
Timing Your Purchase
Homeownership is an exciting idea — particularly for those who have never owned a home before.
As such, you probably don’t want to wait any longer than you have to before buying your first home. However, depending on the state of the housing market, waiting might be your best option.
Even if you can afford it, buying a house when property prices and mortgage rates are high may not be a great idea. Unless money isn’t a concern, waiting for prices to drop could save you tens of thousands of dollars on your first home.
If you’re buying your first home, don’t go into it without any research. Studying the current housing market will help ensure that you get the home of your dreams at a price you can afford.