When is the right time to buy a house?
Certainly not when you’ve got a brand-new baby commanding every waking second of your time. But that’s exactly what we did. We just became new parents, and we’re buying a home. We close in ten days.
But why buy a house? And why do it now?
The Wrong Reasons to Buy a House
If you’ve been paying attention, there are copious compelling reasons to purchase real estate of late. Among the most popular are:
- Low mortgage rates
- Depressed housing prices
- An abundance of bank-owned properties
These were not the primary drivers of our decision, though they certainly helped. For us, it was simply the right time to buy a house.
We did not buy a house because of bargain-basement mortgage rates. Mortgage rates can’t get much lower, and whether they stay low or begin to rise, it’s one of the best times in history to get a mortgage. (Certainly, it’s a great time not only to buy a home, but also refinance. Shop current mortgage rates and see what I mean).
Nor did we buy a house because real estate prices are so low. Unlike mortgage rates, I think it’s plausible that real estate prices could go lower still. I don’t think they will drop much more (at least in our area), but they could. Still, most homes on the market today are great deals, and buyers have a lot of negotiating power.
We didn’t buy a house because we wanted to upgrade our home. We’re leaving a great place. My wife’s been here for five years, I for two, and we’ve really made the little city condo a home. Yes, one could always use extra space when a baby arrives, but we would’ve been just fine.
Finally, we obviously didn’t buy a home because of a tax credit or other incentive. Last year’s home-buyer tax credit is long expired, but I mention this because we didn’t buy a home last year just because of the tax credit.
The Right Reasons to Buy a House
So why did we buy a home?
We bought a home because we were ready and we found the right house.
With our daughter on the way, we started looking at homes in May. We felt that our lives and finances were finally stable enough.
We found a home we liked, made an offer, and lost. We found another…a foreclosure…did some due diligence, and decided against making an offer. And then we waited. Months came and went and nothing on the market interested us…until August.
With our daughter’s due date just a couple weeks away, we decided to spend a Sunday afternoon visiting a couple of open houses. To be honest, we didn’t think we were going to find our house that day…we were mostly curious and looking to get out of the house on a beautiful summer day. In fact, we had told ourselves that we would wait until several months after we had the baby to buy a home.
But lo and behold, we really liked the first house on our list that day. It met all of our criteria: good condition, a sunny interior, two bathrooms, a small but private yard, and a location on a quiet street. And compared to other homes we had liked, this one was less.
We didn’t jump right away. We didn’t see anybody else at the open house, so we called our real estate broker and scheduled a time to go back and get her opinion.
She liked it, too.
On a Monday night, we decided to make an offer on the house. The following morning, my wife had a doctor’s appointment and we agreed to meet our broker afterwards to sign the offer paperwork. What we didn’t count on is the doctor saying that she wanted to induce my wife into labor that night.
Crazy as we are, we moved forward and submitted the offer knowing that we would be in the hospital for the next couple of days. Later that day, the seller countered our offer, we countered back, but then it was time to go to the hospital, and we all agreed there would be no negotiating from my wife’s hospital room: we had other priorities!
And after our daughter was born, we didn’t think about the house for days. We embraced a casual attitude about the house and told ourselves “if it’s meant to happen, it will.” The following Monday, almost a week later, we got back in touch with our broker and accepted the seller’s second counter.
Then, as my wife endured the first trying week of motherhood, I scrambled to sign paperwork, apply for a mortgage, schedule a home inspection, and basically wrap my head around what we had just done.
If you can picture some of the craziness we endured to make this major life decision right in the middle of another major life event, you’ll begin to see my point: the right time to buy a house is the right time to buy a house.
Not because mortgage rates are low, home prices are depressed, there’s a huge tax credit, or because all your friends are doing it.
Because the time is right.
When’s the right time to buy a home? Only you can answer that. If you live by the highest financial standards, it’s when your credit score is good enough to qualify for the best mortgage rates, most of your other debts are paid, and after paying a down payment and closing costs, you’ll have some cash left over for emergencies.
But there are personal reasons, too. Are you ready to live in one community for many years? If you’re buying a home with somebody else, are you married, or at least committed enough to have confidence in owning a home together?
Only you will know for sure.
Until then, don’t fret about “missing out” on homeownership. There is a lot of evidence these days that renting may be wiser than buying a home. Even if it’s not, I strongly believe that you shouldn’t view rent as wasted money; it’s part of the cost of living just like your electric bill.
Besides, as long as you rent you won’t need to lose sleep over leaking toilets and an aging roof, as I soon will…
What do you think? If you bought a home, was it the right time? How did you know? Did you buy a home and wish you had waited? Share your home buying story with us in a comment.