Are you planning to buy a new house? However, is it the right time to do it? Most people probably think that the real estate industry has crashed since the coming of the global pandemic. Because of this, even experts are not sure how this tragedy will impact the trends for the coming years. But one thing is for sure. Nothing remains constant.
The pandemic has significantly affected housing sales since the coming of the pandemic in 2020. However, there’s an unexpected turn of events when the real estate industry sales soar by the end of 2020, even if the pricing of houses is much greater than its asking price.
With this, the industry bounced back from the losses incurred from the pandemic. However, the trends in real estate are always dynamic and may usually come and go. So, the big question is how the industry will survive with the current economy? To help you address that, here are some housing trends you need to know:
Increase In Real Estate Prices
Many factors can influence real estate prices, including buyer demand and housing supply. If there’s a high demand and low supply, expect house prices to rise. So, how would this increase affect you as a buyer?
If you’re planning to buy a new home, make sure you know what kind of house you can afford by planning a budget. You might feel pressured because other buyers can acquire beautiful homes, but as much as possible, stay within your budget.
Furthermore, here are some you would like to consider to gain more confidence when buying a house:
- Using 25% of your monthly salary for house payment: When preparing a budget, make sure to include property taxes, interests, principal, homeowner’s insurance, and lender’s mortgage insurance. However, don’t forget other fees, such as homeowner’s association fees.
- Make sure that your down payment is or more than enough: By doing this, you’ll be able to save money that you should use for other home essentials. If you’re paying less than this, then expect that you’ll be paying an extra fee to protect your lender. This fee can drown you with extra rates and interest. So, be patient and save all the money you need to avoid having extra fees.
So, get a calculator and figure out how much you can pay and save before buying a house.
Rent To Own Option
When you agree to a rent-to-own agreement, you agree to pay the home as rent for a specific time before you become its sole owner. The good thing about this agreement is that you don’t have to save money for a down payment and receive your house quickly.
However, the house you’re planning to buy through this process will significantly increase. Furthermore, if you can’t pay the rent anymore, expect all previous payments will go down the drain. You may even pay for the maintenance and repair costs during the renting period.
So, before you decide, make sure that you are financially stable. There’s no need for you to hurry things up if you’re not able to do it yet. Just wait for your time, and you’ll have your house soon.
Tricky Down Payment Loans
Getting a personal loan for a down payment is a risky option most buyers should avoid. You need to save at least 20% for the down payment. Of course, you know what will happen next. You’ll be paying endless interests that may increase after time.
With this, you’ll surely get robbed of your financial goals by paying interest and extra fees. So again, take your time and save the money you need for other purposes. You’ll get your home soon. Just be patient.
Slim picking occurs when there are not enough choices. In short, the supply of houses to search and analyze is too low. Because of this, there are not enough houses to meet buyers’ demand, resulting in a house price increase.
Furthermore, here are some tips for finding a house even if market supply is not enough:
- Sacrifice some of your dreams: When searching for a house, it feels great to look for something you want. However, sometimes you have to sacrifice them for your needs, which is most important. So, look for the least expensive home, and upgrade it later on when the time comes.
- Search outside the box: If the location you’re planning to invest in is too competitive, you might need to expand your options and look for other places. You’ll never know if you can find gold hiding in those less popular cities. So, you may want to ask a real estate agent to help you look for houses that fit your needs and budget.
While it is exciting to look for different houses the way they do on TV shows, it would still be best to consider some essential factors. These factors are your financial capacity, payment options, mortgages, and market supply.
Among these factors, the most important one you should not ignore is your budget. It is tempting to take tricky options such as rent-to-own or loan down payments, but as much as possible, never fall prey to these tricks. As mentioned above, it could eat your money and drown you in increasing interest and extra fees.
The most important lesson about buying houses is to be patient. If you can’t afford it, then save until you can. Remember, shortcuts will never be a good idea.