by Anthony O. Kellum, For New Pittsburgh Courier
“Owning a home is a keystone of wealth…both financial affluence and emotional security.”—Suze Orman
There are several factors to think about when considering whether it’s a good time to buy or not. One way to tell if the right time is now is to look at the stock market. This does not mean you need to be an expert, but the stock market does reflect earning expectations 6–24 months in advance. You can investigate and look at sectors where your location has a lot of exposure. For example, Detroit remains known as the “Motor City” and “Motown,” however it is gradually expanding into other industries/technologies such as biotechnology, nanotechnology information technology and hydrogen fuel development. Not to mention its proximity to Windsor, Canada.
Stocks are fast to correct especially compared to real estate, which is slow to correct and usually takes time for everyone to realize the real estate market is weakening. And, by then assets, cash, basically dries up and there is a huge crash. But if the stock market is correcting then it’s time to pay closer attention to investments/property purchases that you are interested in with confidence.
Other important categories that factor into deciding if “now” is the right time to buy are market factors and your personal life factors.
Market factors are things like interest rates (the lower the rate, the lower your monthly payment) and whether it’s a buyer’s market or a seller’s market. A buyer’s market is great for a buyer, there are a lot of homes for sale and sellers are usually willing to drop the price or make other concessions in order to make their home more attractive to sell. In a seller’s market, the home sellers have the advantage. Usually there are fewer homes available, and typically there are multiple buyers interested in their property and owners can demand the highest price available.
The personal life factors that may play a role in the timing in your home buying decision include:
Your financial situation:
•How is your credit score?
•Do you have the income to qualify for the loan you want?
•Do you have money saved for the down payment?
•Can you afford the other home expenses that come with home ownership?
Lifestyle you desire:
•Do you have the time to maintain your home?
•How soon do you want to buy a home?
•Do you plan to move again soon for work or school?
•Is the size of your family changing?
Factors ranging from interest rates to determining if you want to stay in the same city play a role in the timing of your buying decision.
There are many avenues you may travel when deciding on the right time to buy so the best approach is to buy a home when you can afford it. One thing is certain and that is the real estate market is cyclical, don’t attempt to predict interest rates or home values, if you are ready and can afford it, the best time to buy your home is now.
(Anthony O. Kellum, speaker, author and TV host is President of Kellum Mortgage, LLC.)
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