5 Reasons Buying a Home Is a Good Idea Right Now and 5 Reasons It Isn't

With the real estate market changing rapidly, homebuyers are in quite the pickle as to whether they should buy right now. There are two sides to the coin, with positives and negatives to consider. If you're on the fence about buying a home, these 10 factors could help you decide.

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Extremely low housing supply was one of the biggest driving factors for home price inflation over the last few years. While we're still in a housing shortage, the number of homes for sale is steadily increasing.

Housing inventory in July 2022 was up 4.8% from the month prior, according to the National Association of Realtors (NAR), and up over 30% from the year prior, according to Realtor.com. More inventory means more buying choices and could be a sign we're headed toward a more balanced housing market.

Competition has been fierce in the housing market as of late. Multiple offers, all-cash purchases, or offers tens of thousands of dollars over asking became the norm for a bit. But thankfully, competition is waning.

In addition to more homes hitting the market, there are also fewer buyers, meaning homebuyers today face far less competition than they would have just a few months ago. Existing home sales are down for the sixth straight month, meaning you may not have to compete with many others to buy a home today.

Prices have grown in the double digits for over two years now. This unsustainable price growth has made it a challenging and expensive time to buy. But it seems relief is on the horizon. Realtor.com and NAR both reported that July 2022 showed the first month-over-month decrease in the median home price in years. Decreasing home prices means you could buy a home for less right now.

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Many buyers over the last two years were purchasing properties site unseen or waiving inspection clauses to gain a competitive advantage. However, more inventory, less buying demand, and decreasing prices mean buyers have more room for negotiations. If you're making an offer, there's a good chance you can negotiate the price or other terms relating to a home purchase to get a better deal.

Locking in a fixed-rate mortgage is one way of combating today's high inflation. The set monthly payment won't increase as the cost of goods or services does. This means a $1,200 payment today will be a lot more affordable in 10 years due to the impact of inflation over the long haul.

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Prices may be dropping slightly in some markets, but they are still near record highs, making right now a rather costly time to buy a home. If your goal is to score a deal, today's market likely isn't your best opportunity.

There's a good chance rates will continue to climb, even if only slightly, for the remainder of 2022 and 2023 as the Federal Reserve tries to combat inflation. Locking in a rate today could lead to a lower mortgage rate than you may pay in the future, but there is no guarantee. Today's higher rates mean you're paying more than recently, no matter what.

There's a lot of talk about a potential recession and the impact it could have on the economy. High inflation and weakening economic conditions could lead to job losses, making it difficult to maintain a mortgage payment or the required upkeep of a home in the near future. If you're waiting to buy, consider your job security and savings on hand to make sure you'll be able to maintain your mortgage payment through a recession.

ALSO READ: Inflation and the Housing Market: Is Now a Good Time To Invest?

Predictions on home price movements are all over the place right now. Some experts believe home prices will continue to grow over the next year, just at a slower rate, while others believe certain markets are clearly headed for a correction.

Waiting to buy a home in hopes that prices will fall could mean you actually pay more because prices keep rising. But buying at a higher price today could leave you underwater if prices fall.

Lending is usually restricted during a recession as banks try to cut losses and preserve capital. That means waiting to buy a home could leave you without viable loan options or simply make it more challenging to get approved.

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Market conditions are definitely changing in favor of homebuyers as prices weaken, but a lot of factors still make today a better time to buy than in the future. Higher interest rates impact the cost of housing more than many borrowers may believe, and there is no guarantee that prices will continue falling.

If you're ready to buy a home, have sufficient funds for a down payment, and still have savings, then buying today is probably in your best interest. Just remember to keep a long-term outlook on the purchase, and you'll be less worried and susceptible to temporary market swings.

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