Buying a house can be an exciting and emotional process. Many turn to homes in Montana for value and an amazing lifestyle. ional process. Before starting your home search, you’ll want to understand the ins and outs of homebuying. This will empower you to make decisions that are the best for your family — and your wallet.
What to consider
Is now a good time to buy a house?
Yes and no. Mortgage rates reached record lows in early 2021 and have stayed low by historical standards throughout the year even as they fluctuated. However, strong demand for homes pushed prices up and frustrated many potential homebuyers. According to the CoreLogic Case-Shiller Home Price Index, property prices rose by 18 percent between September 2020 and September 2021. Time may be running out to lock in an affordable mortgage, because experts predict interest rates will continue to trend upward this year. In many areas of the country, Realtors reported intense competition for homes last year, with some properties getting dozens of offers and going into contract within days of being listed.
That reality has created inevitable concerns about buying at the peak. Home values go up over time, but there is a possibility that prices in some places have hit a plateau.
“I would be careful about buying near the top of the market, especially if I want to be in the home for only a few years,” says Ken H. Johnson, a real estate economist at Florida Atlantic University and co-author of the Beracha, Hardin & Johnson Buy vs. Rent Index. “If you look to buy, bargain aggressively and be willing to walk away. Real estate most definitely is a good investment, but don’t just buy now because that’s what everybody else is doing.”
Should I buy a house?
Taking the leap to homeownership can provide a feeling of pride while boosting your long-term financial outlook, if you go in well-prepared and with your eyes open.
When thinking about buying a home, consider whether you want to put down roots or maintain flexibility with your living situation. How secure is your job, and can you comfortably budget for home repairs and maintenance on top of monthly housing payments? Are you ready to stay in one place, and do you have kids or family members to consider?
When should I buy a house?
In normal times, spring is the traditional start of the home-buying season, with many listings typically hitting the market. The market still hasn’t quite returned to normal since the coronavirus upended that schedule, however.. This winter should be relatively slow for buying, but with low housing inventory, it will still feel competitive compared to pre-pandemic off-seasons.
At any rate your own financial readiness is more important than the time of year. This means having your finances organized and your credit in order so that you’ll be able to smoothly secure a reasonable mortgage.
In addition to a down payment, potential homebuyers should have enough money set aside to cover closing costs, which can range from 2 percent to 4 percent of the purchase price.
When budgeting for your monthly mortgage payment, factor in not only the principal amount and interest, but also property taxes, homeowners insurance, homeowners association fees (if applicable), plus private mortgage insurance if you’re putting down less than 20 percent. Don’t forget to set aside money for ongoing maintenance and those unexpected repairs that are bound to pop up, too.
