This is the question on the minds of anyone who wishes to own a house today. The straightforward answer is that it depends. In 2023, the challenges of the COVID-19 pandemic didn’t seem to slow down the housing market. In any case, it appeared to thrive. The only notable impact came on the onset of the pandemic in the spring, which usually is the excellent season for real estate. However, that didn’t last long, and the market has been on a steady rise after a successful rebound.
But will this trend continue similarly in 2023? Maybe you feel let out and want to own a home, but you aren’t too sure about the market direction. Here are some of the things you need to know for you to make an informed decision.
1. You Have Fewer House Choices
No one wants to shop for a house when your choices are narrow. But you have to understand that there are fewer houses than there’s demand. One of the most demanded houses in the USA are beachfront or oceanfront condos. Besides, the increased sales in 2023 reduced the options even more. You’ll need to be prepared to conduct your house search in a limited field. This means that the best homes or the homes you would have gone for may have already been sold. If you are keen on finding a suitable beachfront or oceanfront home, stay connected with a reliable source or relator who may help you get the house at a reasonable cost.
- You have to sacrifice a little more – If you’re unable to find the house you want, be willing to compromise some qualities you wanted in a house and look into other affordable neighborhoods. If you happen to be a resident of Orlando, consider enlisting the services of reputable real estate firms such as Authentic Orlando to help simplify your search. When things settle, you can upgrade if there will be a need to.
- Get Pre-approved fast – It’s always advisable to get pre-approved for a mortgage before house hunting. The low current supply of houses makes this even more critical. A fellow buyer who has already been pre-approved can buy the house you want as you are waiting for your approval to go through. You don’t want to risk that right now.
- Widen your search – If the location you initially planned to buy a home is too competitive, don’t be constrain yourself. You might be lucky and find a perfect house in a less competitive neighborhood. Another reason you should use a real estate agent for your search.
2. The House Prices Are Still Rising
In 2023, house prices rose steadily, and they still are in 2023. Since January 2023, house prices have gone up by 11%, which is the fastest growth recorded in 15 years. If you really have to buy a home in the rising market prices, the first thing is to determine how much you can afford to pay. You’ll need to stick to your budget without bowing to the pressure of going beyond it for any reason. Not even when everyone else around you is getting swayed to add extra funds and break their budgets.
Follow these tips to help you stay within the budget.
- Don’t go beyond 25% of your monthly income on payment – Take into account all homeowners’ expenses on top of the mortgage and interest. These include Private Mortgage Insurance (PMI), Home Owners Association (HOA) fees, and property taxes. Ensure you can afford to repay the mortgage, utilities and survive comfortably.
- Save 10-20% on down payment – If you’re required to pay a down payment of 20% or more, you can avoid the PMI the extra fee included in your mortgage to protect your lender in case you default. So, if you can, save a significant down payment.
- Go for the 15 years Fixed Mortgage – This is the lowest-cost home loan. The 30-year, adjustable-rate and other loans charge extra fees and interests that could keep you in debt for a really long time. Pass those offers.
Do your Maths, figure out how much you can afford to pay on the mortgage each month, and then talk to your agent to help you find homes within your range.
3. The Mortgage Rates Are Still Low
The mortgage rates are quite low, where the rate for the 15-year fixed mortgage stands at 2.42%, which is relatively low. These rates greatly improve your chances of affording a home. However, if you aren’t ready to buy a home, don’t do it because of the low rates. But if you can afford it, it’s an excellent time for you to buy a home.
The bottom line is if you can afford a home take the chance and run with it, but if you can’t, you may need to consider waiting for your circumstances to change.
4. Have An Emergency Fund
These are times of economic hardship, and it’s difficult to predict what the future looks like. You’ll want to have a savings to cater for emergencies or mortgage payments in the event of income loss. Even though the arrival of the COVID-19 vaccine things may seem to be looking up, there’s still a lot of uncertainty on job retentions. You need to be able to survive as you find a plan to cater to your needs.
Savings are extremely important for a homebuyer in 2023. That way, you can repay your mortgage if you lost your income right after closing on your house.
Should You Buy A Home In 2023?
Whether or not to buy a home in 2023 is not about the market process and condition or low mortgage rates. It depends on your personal ability to purchase or repay the mortgage. If your finances are okay, you have a low level of debt, and a good credit score, 2023 is a good time for you to own a home.
But if you have worries about down payment affordability, debt, and a poor credit score, you can plan to buy a home for another time. Buying a home in the right conditions but at the wrong time can place a substantial financial burden on you. Don’t rush. If 2023 isn’t a good time for you, wait. You never know, next year could present better buying opportunities to you. These uncertain financial times call for smart investing.