Many are wondering if they should buy a house now or wait. The answer is more complex than some may think. Whether you’re a first-time homebuyer, an experienced buyer, or looking for an investment property, consider the factors below.
Understand Your Market
Local real estate trends vary across the country. To better understand our local market, watch our “Market Update” video below, which includes stats for Kitsap County’s first quarter. The average home sale price is $599,000, and that’s a slight decrease of 1.2% when comparing home sale prices in 2022’s first quarter.
Windermere Kingston’s Manager, Jeanette Paulus, says, “The spring market is a great time to start looking at homes with the new listings popping up on the market.” Greater inventory could mean a shift in the real estate market.
Factor in Your Mortgage Rate
A qualified lender will be able to work with you to pre-approve you for a mortgage. Look carefully at the lender’s proposal and terms. It’s okay to get quotes from multiple different lenders before deciding on which loan to pursue.
Most homebuyers choose a 15-year or 30-year conventional mortgage. However, mortgages come in all shapes and sizes. There are first-time homebuyer programs, VA loans, and other loan programs available. Here at Windermere, we’re proud of our partnership with Penrith Loans, and Mortgage Consultant, Cherie Kesti is a great local resource. The popular real estate saying, “you marry the home but date the rate” is important to consider. Rates do change, as we’ve really seen in the last few years. So if you’re financially ready to buy and the timing is right for you personally, you can refinance down the road. As Windermere’s Chief Economist, Matthew Gardner, says, “Education is everything.” To learn more, check out his latest video on mortgage rate predictions and misconceptions.
Examine Ways to Pay Less Interest on Your Mortgage
With today’s mortgage rates, buyers are getting creative with ways to minimize their overall interest payments. Coming up with a larger down payment has its pros and cons, but it will minimize the overall interest paid on a loan.
There is also the option to do a temporary or permanent mortgage buydown. In addition, doing biweekly payments on a mortgage can significantly decrease the amount of interest paid over the life of the loan. Windermere’s home monthly payment calculator is a great tool for potential homebuyers to preview monthly payments. Crunching the numbers may help you realize whether now is or is not a good time to buy a home.
Consider Closing Fees and Other Upfront Costs
When deciding if you really want to buy a home now or wait, don’t forget to factor in all the upfront, associated costs. It is important to factor in the funds needed for insurance, down payments, and closing fees. In addition, if the sale goes through, you may have to suddenly repair or replace things like home appliances. Make sure you have a cushion if you decide to buy now. Everyone’s financial situation is different, and you don’t want eagerness or other emotions to cloud your judgment. Buying a home is often the biggest purchase that people make, so thinking about it from every angle first is crucial.
Determine Personal Cash Flow and How Long You Will Keep the Property
Knowing your personal budget and future goals will be essential for deciding if now is the right time to buy a home. For example, considering whether to buy an investment property will largely depend on your local rental market, your ability to manage the property or hire a property manager, and the property’s ability to generate passive income.
Similarly, a family who plans to stay in a home until the children are in college may be in a very different situation than a family who typically moves every two or three years for a job. Additionally, it’s important to think about how long you will have the property to avoid capital gains taxes if you plan on selling within two years.