Becoming A Homeowner

Posted on: 27 May 2021

In many areas, the real estate market is growing by leaps and bounds. But could it be another bubble? Many people are concerned about buying real estate when the market is hot. But it can be just as much of a mistake to wait. Here's what you need to know.

It's More Important to Buy When Money Is Cheap

People are buying real estate now because interest rates are spectacularly low. Real estate prices fluctuate in short-term but they always go up over long-term, at least historically. Most real estate markets have fully recovered from the housing crash, even though the housing crash was devastating. It's better to get in the market with a 3 percent loan than going to the market with a 6 percent loan because it lets you put more money toward the housing rather than the interest.

The Market Eventually Goes Up

For the most part, the real estate market is always going to go up. There are some exceptions. When local economies are devastated and people move out, the real estate market can crash and fail to rebound. But around cities, suburbs, and other thriving areas, the real estate market is going to steadily improve. While it may be slightly slower than a high-risk investment account, it's both a living space and an investment.

You Can't Time the Market

It's true that real estate prices could potentially go down. But it's also true that prices could continually increase. Often, it's better to get into the market now because you can then sell your property later and purchase an even bigger property as your "forever home." If you don't get into the market now, your money will be devalued compared to real estate prices, and you may not be able to afford your "forever home."

Buying Property Is Usually Still Better Than Renting

In reality, it's often a question of your expenses. If you can save money by purchasing a home, it makes sense to do so, even if real estate prices are up. By saving money on rent and building equity, you can put yourself in a better financial situation. That's true even if properties today are much more expensive than a year ago.

The best way to determine whether now is the time to buy is to consult with a real estate agency in your area. They will know your area best and will be able to tell you whether you should invest.