Buying a house is probably one of the largest purchases you will make in your lifetime, and there are certain factors to consider when trying to determine when the best time is to buy a house. As you begin thinking about this, you may want to start looking at homes to see what is available and the price ranges they are, but there are other things you should also factor in. Here are two things to consider when choosing the right time to buy a house.
Statistics For Lowest Home Prices
Research shows that you will most likely get the best deal on a house if you purchase one during the month of October. In fact, experts state that homes sold on October 8 are sold for the lowest prices all year. The worst time to buy a home is in the spring, because the prices of homes are generally highest at this point.
The prices of homes vary, but so do the demand, and these are two factors that help determine whether it is a buyer's market or a seller's market. A buyer's market refers to the times when people get great deals when buying homes. During a buyer's market, there are more homes for sale, which means home sellers may need to lower prices to find buyers. Another characteristic of a buyer's market is fewer people looking for homes to buy.
A seller's market is the perfect time to sell a house, because there are more people looking for homes, which causes the supply of homes to decrease. There are a number of other factors that also dictate which type of market it is at the time, but you should look for a time when it is a buyer's market if you want to buy a house. If you are not sure what type of market it is currently, talk to a real estate agent.
Your Personal Situation
While the housing market can play a role in the timing of when you buy a house, there is another factor that is also extremely important. You must plan your purchase based on your personal financial situation. If the market has the perfect conditions for buying a house, but you are not financially ready, now might not be the best time for you. You should always wait to make sure you are ready. Here are some factors that may help you know if you are ready or not:
- Down payment – Do you have enough money to put down on a house? If not and you have to borrow more than 80% of the value of the house, you may end up having to pay private mortgage insurance (PMI). This can amount to $50 to $200 (or more) per month extra that you will have to pay for your house payment.
- Verifiable income – When you apply for a loan, the lender will need to verify your income, but this is not the only thing related to your income that matters. Lenders often look at a person's job, length of job, and type of job when approving loans. If you recently changed careers and are now working in a completely different industry, it might look bad on your application.
- Location – You should also think about whether you plan on staying in this location for a while or not. If you are planning on moving to a new city in a year, buying a house right now would not make sense.
There are many factors to consider when buying a house, and you can talk to a real estate agent and your lender to learn more about this. You can also begin shopping around to see the homes that are for sale in your area right now. Contact a company like Seller Solutions for more info.