Do you move regularly for work? Or is your job stationary but shaky?
“Buying now and moving in 2 years might not be realistic from a financial point of view,” says Doelger. While there’s always a cost to moving, you’re now adding the costs of selling and buying homes to the equation, he says.
“Buying has a lot of costs people don’t consider,” says Barry Zigas, director of housing policy for the Consumer Federation of America.
But on the whole, “the longer you stay in that investment, the more it pays off for you,” he says.
“The buyer’s starting point has to figure in,” Doelger says. Do you have good credit, plus a down payment and closing costs saved? If you have a 650 credit score and no money saved, you might be able to get a mortgage “but not at the best rates possible,” he says.
What many people forget about homeownership: You need to put aside extra for home maintenance and repairs. A general rule of thumb: 1% to 3% of your home’s value annually.
“And that’s just for a normal year,” Gianola says. “You might have an abnormal year.”
“Usually, it’s financial,” Gianola says. So if you are realistically within 5 years of buying that dream home, you might be smart to wait and keep socking away that money, she says.
“You really can’t rely on appreciation to get you there,” she says. Instead, it’s about how much you can save. And, since “renting is a lot more predictable than homeownership,” consider renting and continuing to put away as much as you can, Gianola says.
But, if you’re more than 5 years out — and you want to own a home now — then go ahead and buy, she says.
If your local market is slow, “you may get stuck with that starter property longer than anticipated,” Gianola says.
And, if you’re buying a starter home, “you have to look at how attractive this home would be” to the next buyer, she says. So when you consider your own starter home, look at what’s most in demand and what’s sitting on the market, Gianola says.
And this is definitely not the time to buy the most expensive house on the block, says Zigas. “That one is not necessarily always the best value,” especially when it comes to resale, he says.
Also factor in what you want in a home and lifestyle, says Zigas. “You can get more value renting on some markets than buying.”
All of the balance sheets can be telling you one thing. But if you love the place — or, conversely, can’t imagine waking up there every day — listen to your gut.
Buying a home is much more than a financial endeavor. Your emotions, hopes and dreams play a huge role, too. That’s why it’s important to decide what you want to do, regardless of the advice of financial pundits, what your family says and what your friends are doing.
Remember that you’re living your own life. Starting in childhood and all the way through adulthood, you have had to resist peer pressure at times. Trust your intuition.