If you’re a first-time buyer, you’re likely renting and wondering why you should continue to pour your equity into the landlord’s mortgage with increasingly higher rents.
Trying to time your move in the market is fraught with risk. There’s an almost endless supply of economic research warning against “timing the market”.
So, if you’re caught up, wondering where the market is heading, here are some points to help clarify the situation. I hope you find them helpful.
Time your move
You take a risk by trying to “time” your action in the current market. If you get it wrong, you’ll sell for less and buy for more. My best guidance is to make a move when you’re ready and not worry about factors beyond your control.
Supply
The supply of available properties can vary significantly over time. While we may see increases in inventory compared to recent periods, it’s important to consider longer-term trends. In some markets, the number of available homes may still be lower than historical averages, potentially leading to competition among buyers.
Demand
Rental prices can fluctuate based on various economic factors. In some areas, the cost of renting may approach or exceed the cost of buying a home. This situation can influence both renters and investors. When rent prices rise significantly, some renters may consider transitioning to homeownership. Similarly, investors might be more inclined to purchase properties in areas with strong rental markets. These trends can impact overall housing demand and potentially affect both the rental and home-buying markets.
Local data
Research the prices being achieved in your neighborhood to find your truth. As an agent in your area, I can help you out. Don’t assume the national averages automatically reflect your situation.
Other factors
If you are a first-time buyer, you may gain tax advantages from maintaining a mortgage, so seek advice and factor this into your calculations.