4 Signals It Might be Time to Buy (vs. Rent) Your Home

To rent or to buy: what used to be a given that you would buy a home as soon as you could afford to has become an agonizing conundrum for many a would-be homebuyer, in the face of the housing market’s big bust and slow recovery. Low prices seem to create a wide-open window of opportunity, but they also create the concern that prices will keep falling after closing. And that Catch-22 has hundreds of thousands of buyers-to-be stuck on the fence.

Mortgage rates are going up. Home prices have been low for the last several years. During this same time frame, interest rates have also been low – this one-two punch has created record-high affordability for the last four years running, causing buyers to believe this window of opportunity won’t be closing anytime soon.

Rents are going up. Rental rates in many areas are also on the rise super-tight lending guidelines have stopped even some who would like to buy homes from doing so. As a result, rental homes are in high demand and rents are rising.

Your income and career are stable for the foreseeable future. The smartest homebuyers look to their lives, not just the market, for signals about when the time is right to buy. Home - buying is a long, long-term endeavor these days. The goal is to be able to commit to staying in the same place, geographically-speaking, for 7 to 10 years before you buy. Most lenders will require that you’ve been at your job – or in the same general field of work – for at least two years before you buy. But that’s the bare minimum – beyond that, you don’t want to be barely beginning a career in which you think you may need to move sooner than that, nor do you want to buy when you’re advanced in your career, but in an industry which is dying or downsizing the workforce in your region.

You can reasonably predict the home you’ll need in the years to come. Since successful homeownership requires that you be ready to be in the place for a good number of years, best practice is not just to buy a home with the space and number of rooms you need right now – rather, you should aim to buy the home you’ll need 5, 7 or even 10 years down the. You might be a newlywed with no kids now, but you plan to have them in a few years. Or maybe you’re a newly minted empty nester right now, but can project that you’ll want to retire - and might not want to climb two flights of stairs to get to and from your bedroom - 10 years down the road. Before you buy, you should be in a position to buy the home that meets your future needs – not just your current ones; and that requires that you have a reasonable idea of your life vision and plan for the future.

With that said. . . buying a home is a massive decision and includes multiple, long-term financial and lifestyle obligations, so if one or more of these signals are present for you, that doesn’t mean you have the green light to run out and buy a home tomorrow – rather, it’s a good sign you should begin down that path, if you’re so inclined. You’ll still need to do the work to make sure your personal finances and holistic life picture are also in alignment before you buy, as well of the work it takes to ensure that your real estate and mortgage decisions are sustainable and smart, over the long-term.

Are you ready to buy your first home, move up home or downsize home? Let us know.

Randy BettInvestment Realtor/Author/Investor

Real Estate Professionals Inc.Better Group Real Estate 202-5403 Crowchild Trail NWCalgary, AB T3B 4Z1

Phone:403-774-7464 Ext:1Fax:403-208-0082Toll Free fax:888-711-6801

Randy Bett www.BetterGroupRealEstate.ca