If you thought more than a year living remotely would make people less inclined to search for a home, you couldn’t be more wrong.
In actuality, so many people are looking for houses right now that properties are receiving far more offers than they normally would. This competitive market has home-buyers wondering, how do you stand out from the crowd without blowing your budget?
Deborah Acosta discusses this for the Wall Street Journal, saying how by March there had been a drop in the number of available properties by 28.2% when compared to the same time last year.
One broker in Texas commented that fewer options combined with lower mortgage rates had people making astronomical offers, in one case offering $500,000 over the asking price.
Being willing to go beyond your budget is one thing, but you don’t want to overpay just because of an unusual time in the market.
One piece of advice analysts offer to avoid overpaying is to only enter into a deal where you will be spending somewhere between a quarter and a third of your monthly income for mortgage payments.
It is also recommended you analyze your current lifestyle costs and be realistic about what you could maintain after a major purchase. If the only way you could afford this home is to dramatically trim back on the things you enjoy, you might regret buying that house in the long term.
Timing is also a major factor to consider. If your current options would necessitate that you pay beyond what you want to get the home you were hoping for, waiting might be better for now.
Maybe you want that new home so you can be closer to work, or have the option to expand your family.
Nobody likes postponing such decisions, but if it will save you a lot to wait for the housing market to rebalance, it might be smart to do so.
The current climate for buying a house is not typical, but it can’t last forever. An aspiring first time homeowner definitely should not consider this housing market to be standard.
For more advice on buying a home right now, be sure to read the Wall Street Journal’s article here.
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