Is now a good time to buy a home?

Is now a good time to buy a home? This is another one of those questions that seems to be cropping up everywhere lately. It may be the result of the self serving advertisements run by the NAR and lenders and real estate agents. You have seen them. “Interest rates are at historically low levels”, “Home prices have leveled off”, and the real doozy “Real estate is the best investment you can make”.

I am reminded of an old rock n’ roll song “Don’t believe all those lies, darlin’ just believe your eyes”.  Can we begin with one basic fact.  You are an individual. While some statements above may be true in your case, that are not true for everyone.  You need to make a decision based on your circumstances. Ignore the hype and deal with the facts.

Your decision should not be as hard as it seems.  First, you have to decide if after careful review of all facts, you can buy a home…do you really want to buy a home.  If the answer to that question is no, don’t bother going through the exercise.  You have to want to own a home.  Owning just because you can is not enough. If you want to own a home, there is a good chance you will appreciate the home and you will take care of the home (and when times get rough, you won’t just walk away from the home).

So, you have decided, Yes you do want to own a home.  Let’s try and answer for you, is now a good time to buy a home?  Look at your current living situation.  It does not matter how much you are paying in rent right now. You have to decide how much you are comfortable paying for housing every month.  You have to decide upon a figure that you will pay every month.  The amount should not leave you broke.  You will need to save money from the day you move into the home until the day you retire. Things come up. Appliances wear out, plumbing springs leaks, lawns need maintenance, etc.  Owning is more than eating, sleeping and watching television.

Once you determine how much you are comfortable paying each month, you can do some basic math to see if you should proceed.  Just for general principles, divide the monthly figure you came up with by 6. (eg. 1800 per month divieded by 6 equals 300).  The figure you have now is just about the amount you would pay in principal and interest for a  $300,000  loan.  This is not exact, it is a ball park figure.  It is just to give you a general idea of what you might be able to afford.

Your next step is to sign on the internet and pull up real estate for sale in the price range you have determined. (In the example, you might pull up homes ranging from $275,000 to $300,000.)  Look at what your money might buy and look at what your money might buy in the area you would like to live.  Now you have some information that is useful in determining if now is a good time to buy a home.

Now, if there is nothing you would want to own at this point in your search, you have answered the question. Now is not a good time to buy a home.  If what you are comfortable paying will only cover rent in an area, then you should rent until your situation changes.

You see, it is always a good time to buy a home.  It just may not be the best time for you to buy a home.  All the advertising and slick talking salesmen can not change facts.  It is a good time for you to buy a home when you can comfortably afford to buy a home in the area you wish to live.

If you would like to have me help you analyze your personal situation, CONTACT ME.  I would rather point you in the right direction and help you in the future than lead you down the wrong path and destroy a relationship forever.

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