If you’re trying to decide whether or not this year is the right time to buy a home for yourself or for you and your family, there are many different factors to take into account beyond just the current state of the market (though that is a huge deciding factor, of course!).
Buying a home is a huge commitment, which involves saving up long-term for a down payment, doing a lot of market research as to whether or not interest rates are in your favor or not, as well as how the current housing market will impact your ultimate decision. Though there are even more factors to take into account, these are usually the big ones people look at before deciding to take a closer look at the choice of homes on the market currently. With all things considered, is 2023 the right time to buy a house? Let’s take a closer look at the different variables involved with buying a home this year that you should consider before committing.
What to Consider Before Buying a House
Before looking at the interest rates associated with the housing market or the various prices regarding homes right now, you should first assess your own financial situation to truly determine if you should then start looking into the other factors at play. Buying a house is a huge financial decision, after all, and if you’re not prepared, it could derail your entire plan or leave you unable to be approved or considered by financial institutions that would supply your loans.
If you’re wondering whether you’re ready to buy a house, let’s consider the following signs you might be good to go.
First, if you have a steady, dependable income that regularly covers all of your bills and will allow you to afford a mortgage, this is a must. If you don’t have a steady employment history or aren’t employed right now, mortgage lenders might determine that you’re not eligible for a loan.
When looking to buy a home, you also need to ensure that your credit is in the right shape to do so. With poor credit, you may not be able to get a mortgage approved at all, and even with scores in the 600s, you might not receive the rate that you’re looking for, especially with the current market. If your credit isn’t in optimal shape, try to build your score up during this time to get a better rate in the future instead of going with a more expensive loan now.
Another aspect to take into consideration is your plan for the future. If you’re just looking to buy a house to avoid continuing to rent but don’t have a solid plan for a future in the home, you might be better off not making a huge commitment like this. For example, if you decide the house isn’t for you in a couple of years, selling it again will be very involved and expensive – so you might be better off renting until you have a more solid scope of what you want to be doing in the next few years. If you’re buying a house, you also want a place that caters to both your current and future needs, including a possible family if you see that in your future. Keep this in mind when you consider the type or size of home you might want.
Keep in mind that buying a house means also taking ownership of everything that goes on with the home itself. If you’re used to renting, this means you’re also used to calling your landlord or super when something goes wrong in your home, like an appliance breaking or needing a replacement, or even for small things like fixing plumbing or changing filters. As a homeowner, this all falls on you – including the expenses involved. Home maintenance will become a part of your routine, and you’ll need to anticipate or have some savings set aside in the case of something significant needing replacement in your home.
The last big factor to consider when thinking of whether or not you should buy a home is if you can afford a home in the location that you want, or if you can afford the type of home you want. After all, buying a home in a location that doesn’t work for you or buying a home period that doesn’t work for you won’t do you much good in your day to day. Finding an area and type of home that fits your budget and what you’re comfortable paying on a mortgage can vary in difficulty depending on what you’re looking for, so give this a good amount of thought before beginning your search and getting disappointed.
2023 Housing Market for Potential Buyers
Now that you’ve considered whether or not you’re in the right financial or mental place to buy a home, let’s look at the 2023 housing market prospects you’ll be faced with, and whether or not you should hold off on buying a home until next year.
The following are some of the biggest factors buyers are faced with in the current 2023 market:
- High mortgage rates
Interest rates are currently at record-high amounts due to high inflation rates, and might climb even higher over the course of the year. Higher interest rates will make your home loan more expensive in the short and long term, even with a large down payment.
Though mortgage interest rates are currently very high, this doesn’t necessarily mean yours will be. Shopping around for the right rate and making sure your monthly payment is something you can comfortably afford makes the biggest difference in your long-term outlook.
- Low housing inventory
Because of high-interest rates, current homeowners have more of an incentive to stay in their current homes, instead of moving and taking on a new mortgage at a higher interest rate than their current one. This leads to a smaller number of homes being put onto the market, which in turn gives you less choice between potential new homes for yourself.
Because of low housing inventory countrywide, there is also more competition for homes that do go on the market, though not as much as there would normally be due to inflation. Less homes are going on the market, and the ones that do are staying on the market longer and selling at or below the list price.
When deciding to buy a home, the biggest thing you need to consider is not only whether you’re financially ready and if the market is favorable for your housing prospects, but whether you’re in the place to take on such a large commitment. Buying a home regardless of market is often a decades-long commitment, after all. Assess your situation and the market to make the right decision for you, and we’ll support you along the way.
If you’ve decided that now is the right time for you to buy, your next step is to choose the right Washington moving company to get you to your new home. If you’re looking for the best professional movers in Washington, see what Bekins Northwest Moving & Storage can do for you and your family today.