Most people want to know when the best time is to purchase a house. It’s really impossible to say when the best time is, but there are certain signs that you can look for. If you’re currently in the market (or about to be), here’s what you need to know.
The Rates Are Extremely Low
Thanks to reductions in the federal rate, the current interest rates are extremely low. Low mortgage rates mean that you can purchase more house for your money. You’ll be paying more in principle, and less in interest with every mortgage payment you make. All other factors aside, low mortgage rates generally mean that it’s a pretty good time to buy.
These rates don’t have much farther to fall, so there’s no point in waiting for them to get even lower. If you have good credit, your rates will be even better — and if you want to pay for mortgage points, you can improve your rates even more.
Home Prices Are Rising
However, it should be noted that home prices are rising steadily in most desirable areas. The economy has been stable, jobs are plentiful, and most people are employed. While people may say that “millennials aren’t buying homes,” that’s generally only true in more expensive places of the country. Homes are being purchased, and when they’re being purchased, the home prices start to rise.
But that doesn’t mean that the rates are rising quickly. In most locations, the rates are rising steadily, but slowly. And that means that it’s still going to be a good time for most people to buy in 2020: you aren’t going to see a huge increase in price from now until then.
A Crash Could Be on the Way
During a recession or market crash, home properties are likely to go down. People stop purchasing homes during difficult economic times, and that means that it’s a buyer’s market. If you wait until there is a recession, you’ll likely be able to get property pretty cheap.
But, of course, a recession means other things, such as layoffs. If you could become a casualty of the recession, rather than a winner of it, then purchasing a house may not be a great idea — either now or in 2020. If a recession is coming, it also means that you could lose your job, and that means that you could lose your home, as well.
It’s not likely that the housing market itself will crash, at least not with the severity of the last housing market crash. The economy as a whole is more likely to experience a recession. The housing market isn’t currently in a bubble, and lenders haven’t been over-lending. So most people should rest assured that the housing values are likely to be reasonable, even if there may be a minor dip during a recession.
Limited Supply Could Lead to Problems
Why are home prices rising? For the most part it has to do with limited supply. There are more people moving into many areas, but there isn’t more housing product. Supply and demand leads to the product that does exist being priced continually higher.
Real estate tends to be local. Whether it’s a good time to buy a house is going to depend on your local market more than anything else. If you’re in an area where real estate is declining and people are moving out, then no, 2020 isn’t a good time. In fact, no year might be.
But if you’re in a fast-paced market that is growing aggressively, 2020 might be a great time to get into the market. The rates are low, and will allow you to start building your equity now.
If you’re wondering about purchasing a home in 2020, it’s time to start now. You’ll need to build up your deposit and improve your credit as much as possible before you apply for a loan. You can consult with a real estate agent regarding whether the market in your area is a positive one.