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Three Questions to Ask Yourself Before You Buy
August 2, 2017 | Gwen Janicki
If you're debating purchasing a Main Line home right now, you're likely to be getting lots of advice. Shake off all the good intentions that friends and family might have when sharing their opinions and get back to the basics. Ask yourself
3 simple questions to help determine if now is the best time for you and your family to buy in today’s market.
1. What was motivating me to buy a home in the first place?
Of the three, this is the most important question
to answer. Financing aside, what is your big 'why' for purchasing a home? For most people, the answer or 'why' will have nothing to do with money. In a study by the Joint Center for Housing Studies at Harvard University it revealed that the top reasons Americans buy a home have nothing to do with finances. They
want to buy a home because it's:
A good place to raise children and for them to get a good education
A place where you and your family feel secure
More space for you and your family
A place where you have better control of that space
What does owning a home mean to you? The answer should be the primary reason you decide to purchase a Main Line home or not.
2. Where are home values headed?
According to the most recent Existing Home Sales Report from the National Association of Realtors(NAR), the median price of homes sold in May (the latest data available) was $252,800, up 5.8% from last year. This increase represents the 63rd consecutive month
with year-over-year gains. Looking at home prices year over year, CoreLogicisforecasting
an increase of 5.3% over the next year. In other words, a Havertown home that costs you $350,000 today will cost you $368,550 if you wait until next year to buy it. What will that mean for you? With prices increasing month after month, it might cost you more if you wait until next year to buy. You should also take into account that the down payment will also need to be higher in order to account for the higher price of the home
you want to buy.
3. Where are mortgage interest rates headed?
While prices are of concern, so are rates. The ‘long-term cost’ of a
home can be dramatically impacted by even the smallest increase in mortgage rates. The Mortgage Bankers Association(MBA),NAR, and Fannie Mae have all projected that mortgage interest rates will increase
over the next twelve months, as you can see in the chart below:
you and your family know for sure if now is the right time to purchase a home. Asking yourself and answering these questions will help you make the right decision.