If you are currently a renter that feels like you are priced out of the home buying market, you are certainly not alone. In fact, it is estimated that approximately 18 million Americans have been priced out of the home buying market due to higher mortgages alone this year. For more on this, check out our previous article titled “Higher Mortgage Rates Leading To Less Buyers“. With all this said, there is still hope, however it may require some discipline. Below we will discuss a few tips for how to regroup and keep the dream of home ownership alive.
Steps to take
Take a break: If you have been trying to buy a home over the past few years, it is quite possible that you may feel exhausted. Whether you are dealing with the frustration of the lack of inventory or consistently being outbid for homes, it is normal to feel overwhelmed and tired. As the market has entered a cooling off stage, this may be a good time to step away for a brief period of time. It is important to point out that this does not mean giving up on your dream of home ownership though.
Pay down debt: Paying down debt such as credit cards or car loans has multiple benefits. In addition to improving your overall credit score, you will also see your debt-to-income (DTI) ratio improve dramatically as well. These measures are critically important considerations for lenders when you are applying for a home loan.
Avoid optional spending: Perhaps one of the biggest pitfalls for many frustrated home buyers is the temptation of spending splurges. A common example of this is a new car purchase. In most of these cases, these purchases are not made out of necessity. As a general rule, you want to avoid purchasing any depreciating assets when you are still saving for a home.
Save, save, & save some more: When taking a break from house hunting, this is a great opportunity to analyze your financial well being while also focusing on saving extra money. After all, you can never have too much money saved for a home purchase. In addition, the stronger the down payment for a home purchase, the more likely that you will be able to get the best available mortgage interest rate.
Keep in close contact with your real estate team: As a best practice, it is recommended that you remain in close contact with your real estate agent and mortgage broker. In doing so, this will allow you to become better educated on your local market. If you are in South Florida, our team at Live South Florida Realty, Inc. is a great option. In addition, simply bookmarking and reading the South Florida Real Estate Blog will allow you to become a more educated home buyer.
In closing, it is important to remember that the housing market is currently transitioning from the seller’s market of the past few years to more of a buyer’s market. In addition, we should see the inventory of homes for sale improving gradually as more homes remain on the market longer. Although mortgage rates are rising rapidly, we are also seeing home prices stabilize or even come down slightly in certain markets. With less home buyers in the market for the foreseeable future, this may be a great opportunity to take advantage of the reduced competition for homes.
Are you in the South Florida market? Be sure to download the free Florida Home Search App for your mobile device today! This is the most up-to-date real estate search app for the South Florida market!