15 Reasons to Stay Out of the Housing Market This Year

Many people felt 2021 was a bad year to buy a home. And unfortunately, 2022 is proving similar. Here are a few reasons you may not want to purchase a home this year.

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Home prices began rising during the latter part of 2020 and haven't slowed down since. If you wait things out, homes could become more affordable to purchase.

A big reason home prices have soared is that there's not enough housing supply to meet buyer demand. But if you wait until next year, inventory could build, and home prices could come down.

ALSO READ: Why Everyone's Making Such a Big Deal About Housing Inventory

Sluggish housing inventory could also make it so that you cannot find a home with all the features you want. And if you're not keen on settling, you may want to wait to buy.

While the residential real estate market is in desperate need of inventory, it's especially starved for starter homes. If you're a first-time buyer looking for a smaller, less costly property, you may need to hang tight and put your home search on hold.

ALSO READ: 3 Reasons Not to Skip the Starter Home -- Even if You Can Afford More House

Last year, homebuyers got to take advantage of low mortgage rates. This year, rates have risen sharply. So, in addition to higher home prices, you'll likely spend a lot more on a mortgage.

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It's not just that mortgage rates have risen sharply since the start of the year. Given that the Federal Reserve still plans to raise interest rates, mortgages could get even more expensive in 2022. That alone is a good reason not to buy in the near term.

ALSO READ: Yes, the Housing Market Will Come Back Down. Here's Why

Because the housing market needs inventory, many homes for sale are landing in bidding wars. If you'd rather avoid the stress that comes with entering one, you may need to sit out the market this year.

ALSO READ: 3 Bidding War Strategies to Use in Today's Housing Market

You've probably noticed that everyday living costs are up due to inflation. As such, now may not be the best time to take on the expense of owning a home.

Many financial experts are sounding warnings about an impending recession. As such, buying a home right now could constitute a risk, especially if you work in an industry that's vulnerable to layoffs during an economic downturn.

If you don't have a steady job, you might struggle to get a mortgage. But even if a lender approves you, you may want to wait until things calm down to buy a home. If you lose your job shortly after purchasing a home, you might risk losing it.

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A lot of people made a career pivot during the pandemic. But if you're new to your field, you may want to wait on buying a home. If your job situation doesn't work out, you won't want the stress of a mortgage payment hanging over your head and making it so that you can't explore other employment options.

If you don't put down 20% of your home's purchase price at closing, you'll be hit with private mortgage insurance. That's a costly premium that will make owning a home more expensive. And at a time when home prices and mortgage rates are already up, that's not a good thing.

ALSO READ: What Is Private Mortgage Insurance?

Many people saw their credit scores take a hit during the pandemic. If you're in that boat, it pays to hold off on buying a home until that number improves. Without good credit, you might struggle to get a mortgage or qualify for a decent rate on one.

ALSO READ: 3 Surprising Reasons Your Credit Score Keeps Taking a Hit

You may have a portion of your brokerage account earmarked for a home down payment. But many investors are seeing losses in their portfolios due to general market turbulence, which means now's a bad time to cash out stocks for homebuying purposes.

At this point, more and more companies are starting to call workers back to the office. But some companies haven't yet settled on their long-term plans. And if yours is one of them, you may want to wait until a clear policy is spelled out before buying a home. The last thing you want is to purchase a home in a certain neighborhood only to get stuck with a miserable commute.

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Today's housing market is a tough one to navigate, as is today's economy. Waiting until 2023 or beyond to buy a home is a decision that might serve you well financially, so it pays to consider delaying your homeownership plans, even if you're eager to buy this year.

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