Buyers – Stop Trying to Time the Market – Focus on What You Can Control

If you're thinking about buying a home, you've probably heard plenty of reasons to wait.

Maybe mortgage rates will come down. Maybe home prices will fall. Maybe there will be more inventory next year. Maybe the economy will change.

The problem is that none of us can predict these things with certainty. Interest rates are beyond your control. Home prices are beyond your control. Inflation, the economy and housing inventory are beyond your control.  So rather than spending all your time trying to figure out when the market will be at its "perfect" point, a better approach is to focus on what you can control.

Here are five things every buyer should consider.

1. Your Monthly Payment

Don't start with the question, "How much house can I qualify for?"

Start with, "What monthly payment am I comfortable with?"

Your true housing cost isn't just the mortgage payment. You also need to consider property taxes, homeowners’ insurance, maintenance, utilities and, where applicable, homeowners association fees.

A lender can tell you what you're qualified to borrow. But only you can determine what payment fits comfortably into your lifestyle. Buying a home should improve your life—not leave you feeling financially stretched every month.

2. Your Cash Position

The down payment is only part of the money you'll need to buy a home.  You'll also have closing costs, moving expenses and potentially some immediate repairs, furnishings or improvements once you move in.  And perhaps most importantly, you don't want to empty your savings account just to get into a house.

Having an adequate emergency reserve gives you flexibility when something unexpected happens. A home should be an asset you own—not the reason you have no cash left in the bank.

3. Your Other Debt

Your mortgage isn't the only debt that affects your financial flexibility.  Car loans, student loans, credit cards and other monthly obligations can make a big difference in how comfortable your overall budget feels.  Two buyers with the exact same income may have very different financial situations because of their existing debt.

The less debt you carry, the more room you will generally have in your budget for your new housing expenses—and for the other things you want to do with your money.

4. Your Income and Job Stability

Buying a home is a long-term financial commitment, so it's important to look beyond today's paycheck.

Ask yourself: How confident am I in my ability to maintain my income over the next several years?

Of course, nobody can predict the future. But if your employment or income situation is uncertain, taking on a large new financial obligation may deserve some additional consideration. On the other hand, if your income is relatively stable and the payment fits comfortably within your budget, short-term changes in the housing market may matter much less.

5. How Long You Expect to Own the Home

This is one of the most overlooked considerations when deciding whether to buy.

If you think you may sell again in a year or two, short-term changes in home prices and transaction costs can have a much bigger impact.  But if you're buying a home you expect to own for many years, you have more opportunity to ride out normal market fluctuations.

That's because buying a home isn't really about predicting what will happen six months from now. It's about whether the home makes sense for your life and your finances over the period you expect to own it.

Stop Trying to Predict What You Can't Control

• Will mortgage rates be lower next year?
• Will home prices go up or down?
• Will inventory improve?

Nobody knows for sure.

And that's exactly why we encourage buyers to spend less time trying to predict the market and more time understanding their own financial situation.

You can't control the market. But you can control your budget, your cash reserves, your debt, your income situation and how long you're likely to own the home.

If those numbers work—and the home fits your needs—it may be a very good time for you to buy.

The "perfect" time to buy doesn't exist.

But there can be a right time for you.  Let us help you break down your personal situation to see if now is a good time to make that move.