Is Now the Right Time To Buy a Home?
It’s an age-old question with no simple answer: Is now the right time to buy a home? Whether you should buy a house now depends on a wide range of factors unique to you, such as your financial situation, your long-term goals, and what you’re looking for in a house versus what’s available.
To help you better determine if now is the right time for you to buy a house, Daffodil Storage has gathered several common house-buying questions and considerations for you to explore.
When Is the Best Time To Buy a Home?
While it can vary depending on the region you live in, the fall and winter are typically the best times to dive into the market for a house instead of moving in the summer. Real estate agents often see fewer buyers in the colder months of the year as people focus on the holiday season, whether taking care of the kids while they’re off from school or traveling to see loved ones across the country.
Less demand often means lower prices, which gives you more bargaining power as the potential buyer. That said, you should keep your chosen area’s housing market, interest rates, and several economic factors in mind to determine the best time to buy a home.
The Current Housing Market
The seasonality of house hunting becomes less relevant if you’re trying to buy in a popular market. When looking at popular places to buy a home in Washington, such as Puyallup and Tacoma, take into account that these are considered seller’s markets.
A seller’s market means the area you’re trying to buy a house in is highly competitive, either because of low interest rates, growth in job markets and the local population, or development restrictions. You’ll need to be prepared financially and mentally to go above the asking price, possibly waive certain inspections, or adjust your closing date expectations to beat other interested buyers.
If going above the asking price or waiving inspections gives you any pause about buying a house, the current housing market in the area you’re considering may be a sign that now may not be the right time to buy a home.
Mortgage Rate Trends
Alt Text: A little red and white toy house surrounded by stacks of coins, with a graph behind it representing mortgage rates. (Source)
Mortgage rate trends are always key factors in deciding whether to buy a house now. You can use resources like Freddie Mac and Bankrate to find and compare mortgage interest rates, but what’s considered a good interest rate for a mortgage? Like many answers tied to housing questions, it depends on your financial situation, what you can afford for the overall price of the house you’re considering, and how the mortgage rate will impact that cost.
Additionally, mortgage rates change all the time. If the interest rate is currently 7%, for example, a good 15-year mortgage rate and a reasonable 30-year mortgage rate could look like the high-5% range and high-6% range, respectively.
Economic Factors To Consider
In addition to mortgage rates, the overall state of the economy plays a role in when you can or should buy a home. If the federal funds rate, which drives the United States’ economic activity, is high, it can make taking money away from buying groceries or paying rent to save for a house challenging.
Another economic factor to consider is the employment rate. If the employment rate is low, that can lead to a wait-and-see mindset for many potential home buyers, which could either influence you to wait as well or dive into the housing market while others pause.
First-Time Buyers Versus Repeat Buyers
Based on a variety of factors, such as high home prices, elevated mortgage rates, and limited inventory, now could be a hard time for many first-time buyers to secure a house. Unlike a repeat buyer, you don’t have the equity of selling a house to offset the costs of buying another home.
That doesn’t necessarily mean it’s smooth sailing for repeat buyers, however—if you bought a home with lower mortgage rates in the 2010s and between 2020 and 2022—you may not be eager to let go of your affordable mortgage to take on a higher one.
Whether you’re a first-time home buyer or looking to sell your current house, renting versus buying a house should be driven by whether it would be a financial strain or relief for you.
What Is a Good Credit Score To Buy a House?
Your current credit score is another indicator of when you should buy a house. Typically, you need a credit score of at least 620 to qualify for good mortgage rates and loan conditions, but the higher it is, the better, especially if you’re considering a jumbo loan.
If your credit score is closer to the 500 to 600 range, you can still qualify for home loans insured by the Federal Housing Administration. FHA loans require a FICO score of 580 or above to secure a 3.5% down payment, and if your score is in the 500 to 579 range, you’ll have to provide a 10% down payment.
Being a first-time renter is a standard building block for raising your credit score. If you’re currently renting an apartment for the first time, consider putting the house hunt on pause until you’ve spent more time living in an apartment or rental house.
Buying a home is a big financial decision, and giving yourself more time to build credit and save for a down payment can be beneficial, even if it means less space for the time being.
Can I Buy a Home With No Down Payment?
In theory, yes, you can buy a home with no money down using what’s called a zero-down mortgage. However, your ability to do so depends on whether you qualify for a zero-down mortgage through a government-backed loan from agencies such as the U.S. Department of Veterans Affairs or the U.S. Department of Agriculture.
Private lenders are less likely to offer zero-down mortgages because of the financial risk they take on, but they are more open to working with you for a low-down payment mortgage.
How To Simplify the Timing of Buying a House With Self Storage
Alt Text: A woman packing a blue ceramic vase into a moving box with Bubble Wrap. (Source)
Whether you have yet to start the home buying process or you’re preparing to get pre-approved tomorrow, there’s one more layer to deciding if you should buy a house: how quickly you can move.
If you’re considering entering the race to buy a home soon, one of the best things you can do to simplify your potential transition is start packing your non-essential belongings in a storage unit. That way, if your potential seller needs a swift closing process, you’ll be ready.
Have you decided that now isn’t the time to buy a house, but need more room in your current apartment or rental home? You can reorganize using self storage. A Daffodil self storage unit is a great spot to tuck away holiday decorations, seasonal gardening gear, and other belongings taking up space.
Create the Space You Need for Your Home Buying Journey at Daffodil Storage
Whether you’re ready to jump into the Washington housing market or you want to refresh your current home while you continue to plan, Daffodil Storage has your back. As your local storage provider in several communities throughout the Puget Sound area, we’re committed to helping you organize your life with affordable, convenient storage solutions.
Find a Daffodil Storage facility near you and start enjoying more space today!