Is It a Good Time to Buy a House Even With Price Increases?
A way of thinking exists that any time you have the funds to buy a house makes the perfect time to buy a house. That’s because you move from a place of paying rent and accruing no equity to a place of paying off a mortgage and accruing equity. The latter contributes to your net worth.
In the larger scheme of things though, is it a good time to buy a house?
It largely depends on the area. In New York City, for example, you should buy now. Prices have risen in the last two quarters, but they are at their lowest anticipated levels of 2021. Ideally, you would have purchased real estate there six to eight months ago, but aside from that, now makes the best time.
The increase in cost stems from people’s inability to move until now. The pandemic of 2020 froze people in place if you will. With travel restrictions as they were, and in some areas remain, few homes went to market. It makes no sense for people to sell when they cannot move to a different location.
This means fewer homes for sale, especially in New York City. That drove up prices in an already pricey area.
Deal with Your Money Step By Step.
Buying a New Home
While you can try to time your purchase during the best time of year to buy, typically the fall, real estate agents maintain that the ideal time to buy remains when you have the money to do so.
Of course, some things do make now a better time to purchase, including expanded work from home policies and plummeted mortgage rates. The pandemic had those two positive effects on buying and selling houses.
You can now purchase a home at a lower interest rate than in recent years. This makes it an ideal time if you do not qualify for any of the special lending programs provided by the government, such as the Veteran’s Administration loans.
The other item, working from home, makes it easier to buy because it opens up choices for people. Since people can now move to any location to work from home, they can purchase in the cheapest areas.
Where Should You Buy a House?
If you want to put on the Ritz, you won’t move to any of the cheapest locations to live in the US. The weather makes some of these areas beastly during certain times of the year, but since you already probably acclimated to staying indoors for long periods of time and having your groceries delivered, who cares, right?
It really does mean more to own a nice home. You build equity. You can settle down. You can unpack your things. You get to do what you want to do with the area around your home. Your yard is your yard.
Your choices of the 10 most affordable US markets include:
- Detroit, Michigan
- Cleveland Ohio
- Toledo, Ohio
- Memphis, Tennessee
- Baltimor, Maryland
- Rochester, New York
- Milwaukee, Wisconsin
- Montgomery, Alabama
- Buffalo, New York
- Kansas City, Kansas
Parma and Parma Heights, Ohio, just 10 miles outside of Cleveland, remain reasonable and suburban. It doesn’t come quite as cheap as Cleveland itself, but you obtain a larger yard with your purchase. You’d pay an average of $110,103 for a roomy home in Parma. If you like living in the city, you can settle into Cleveland though, and save quite a hefty amount. You will nearly half the cost of the same size home by purchasing a house in Cleveland, OH where the average home costs just $64,993.
Consider Also Lake Michigan or The Buffalo Area
You might think that would be the only urban area with growth potential, but no. The US has many. For example, how about a lakeside home on Lake Michigan, just north of Chicago, IL? That describes Zion, IL, which puts you about 130 miles to the Wisconsin state line and a road trip away from delicious cheese. The average home in Zion costs just $107,276. Similarly, you could move to Waukegan, IL, a short, 40-mile commute to Chicago, and also reside on Lake Michigan. Your average cost for a four-bedroom, two-bathroom home there will be $98,226. You could also snap up a roomy house in Park Forest, IL, a 35-mile commute to Chicago for $75,647.
Perhaps you have a teen headed for Syracuse, NY to attend the university. Perhaps you just graduated from that university and lament how you will afford rent on your entry-level salary. Why rent when you could own? Nearby Utica, just 55 miles east of Syracuse costs just $107,211 for the average home. Your mortgage payment would cost less than most rents.
The Buffalo area has some steals, too. Okay, there is the potential of eight feet of snow in winter. Build a fire in the fireplace, order sushi, and enjoy the view. You could own a home in the suburb of Cheektowaga, NY, 10 miles northeast of Buffalo for $101,475. If you prefer to live in the city, the same size home in Buffalo costs just $97,288.
Atlanta Area, Georgia or Florida
You do not have to live where it remains cold most of the year to get a great price on a house. You can purchase a home in the Deep South, in Augusta, GA for a tiny $98,233. You’ll live a 145-mile road trip to Atlanta which makes catching a Braves game perfectly feasible. Maybe a small city’s not for you. You could live in the Atlanta metropolitan area and easily afford a nice home. Move to Lithonia, GA, where the same-sized roomy house costs an average of $94,076. The Atlanta metro provides another affordable choice in the suburb of Riverdale, a tiny 13 miles drive to the city. Your new four-bedroom, two-bathroom home in Riverdale costs just $68,207.
Of course, many people dream of moving to Florida. Maybe it is the orange trees, maybe it is the constant sunshine, but you can make your FL dreams come true for less than $100K. You can even live on the lake. Less than an hour south of Orlando lies the community of Lake Wales, FL. In Lake Wales, a four-bedroom, two-bathroom home costs just $82,330.
Moving During a Pandemic
Okay, let’s face it. Much is not ideal about 2020. It seems that 2021 will be better though. We have the vaccine, and many areas lifted their travel bans. You could conceivably move to any locale you’ve ever dreamed of living in because now, nearly every person gets to work from home, at least to some extent.
While some folks might hate this, as long as you have an introverted personality and a career that lends itself to remote work, you can move. You can buy. You can pay next to nothing for a nice house.
The average rate for a 30-year mortgage just dropped from 3.18 percent to 3.11 percent. That alone makes this a buyer’s market.
If you have $10,000 to put down on a home, you will need a $90,000 mortgage. A 30-year mortgage would mean you would pay $250 per month for your loan payment. That costs much less than most rents. You would still pay a tiny bit of interest, but that equals just $2,799 for that 90K. That interest rate adds less than $8 to your monthly payment.
Let’s say you want a shorter-duration mortgage. You can pay the same home off in ten years for just $750 per month.
Buying in Other Parts of the Country
You can find many great housing deals throughout the US. The states of Ohio, Iowa, Oklahoma, Indiana, and Michigan offer the best overall prices for housing. In Youngstown, OK, you can purchase the average home of four bedrooms and two bathrooms for less than $65,000.
While the Consumer Financial Protection Bureau works on a way to stop many of the foreclosures looming, many individuals remain at risk for losing their homes whether they own or rent. A glut of foreclosures could make costs drop even further.
Qualifying for a Loan
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That’s why it remains the perfect time to buy as long as you have the money. If you can make a down payment, you can seriously think about buying a new home. You also need a decent credit score, but you can raise your score using relatively simple methods, such as paying your bills on time for six months in a row. When you free up your credit so you can improve your debt to credit ratio, you make it easier for yourself to qualify for a loan.
You can use the tools on Goalry to check your credit score. You can also investigate your options for budgeting (Budgetry), earning a second income (Billry), reducing expenses (Cashry), investing (Wealthry), and doing your taxes (Taxry).
Final Thoughts
We make it our business to help you improve your financial situation. We do offer a tool on Loanry that helps you determine from which loan companies you would most likely qualify for a loan. We do not make loans. We do not own those companies. We simply research those companies for you, so you have a ready source of experienced financial information at your fingertips.
We at Goalry have the time and experience to conduct the research, build the tools, and write educational articles to help you improve your financial situation. You can use us to help you afford the home you dream of owning. We put the research in to let you easily find the top twelve buyer’s markets and to explain why now really is the time to buy. So, get started house hunting.