[vc_row][vc_column][vc_column_text]Last week, a Fannie Mae survey showed 77% of people believe it’s a “good time to sell.” This also confirms an increasing number of Americans who believe it’s a “bad time to buy” a home. While greater negativity has been expressed toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated even more negativity. It’s likely that affordability concerns are greatly affecting those who aspire to be first-time homeowners.
What impacts home affordability?
A mortgage payment is determined by the price of the home and the mortgage rate on the loan used to purchase it. Monthly mortgage payments have gone up for buyers for two key reasons – mortgage rates and homes prices have increased over the last 12 months. Based on these factors, a home may be less affordable today, but it doesn’t mean it’s not affordable.
While payments have increased dramatically, if we adjust for inflation, today’s mortgage payments are actually 10.7% lower than they were in 1990. So, while you may not get the homebuying deal you would have gotten last year, that doesn’t mean you shouldn’t still buy a home. Here are a few options for you:
Alternative 1: Renting
Some may consider renting as the better option. However, the monthly cost of renting a home is skyrocketing. If you continue to rent, chances are your rent will increase at a fast pace. That means you could end up spending significantly more of your income on your rental as time goes on, making it even harder to save for a home.
Alternative 2: Wait it out
A lower monthly payment would require mortgages and home prices to decrease over the next year. However, experts are forecasting the exact opposite. The Mortgage Bankers Association (MBA) projects mortgage rates will be at 4.2% by the end of next year.
Based on these projections, by waiting until next year, you’d potentially pay more for the home, need a larger down payment, pay a higher mortgage rate, and pay an additional money each year over the life of the mortgage.
While you may have missed the absolute best time to buy a home, waiting any longer may not be your best option. Let’s connect to get you on the path to homeownership.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][wpforms id=”6993″ title=”false” description=”false”][/vc_column][/vc_row]