Sept. 17, 2019
According to the US Census Bureau, approximately 64% of Americans own homes. It hit a peak of 69% in the mid-2000s, just before the "bubble" burst. We've always had renters. In fact, the recession that hit towards the end of the 2000s caused many former homeowners to become renters again. In the last couple of years, the US real estate market began to come back around. Renters became homeowners. But the financial scare from the recession stayed with many citizens. Is another recession looming around the corner? Am I ready to make a huge financial commitment like a mortgage payment? Should I wait for the market to turn again before I buy? There are some valid reasons why you should not buy a Tucson home right now. But some may be just excuses created from fear. Which one pertains to you?
Why You Should NOT Buy a Tucson Home Right Now
I Really Need to Save More Money
Yes. You need money to purchase a house. And the more you have to put down, the lower your monthly payment will be. However, you might not need as much as you thought you did. Make an appointment with a lender as soon as possible. Even if you don't plan on buying a Tucson home until sometime next year or later, sit down with a lender right now. They can look at your current financial situation and help you develop a plan to get you ready when you do decide to buy a house. You might even qualify for loans right now that don't require a huge downpayment and will get you in a home sooner. That is especially true if you are a current or former member of the military.
Also, keep in mind that prices have consistently gone up over the last couple of years. There's a good chance that this trend will continue into the next year or two and maybe beyond. So, the longer you wait, the more it will cost you to buy a new home. As home values increase, the same goes for rental prices. What you pay now in rent could very easily cover a mortgage payment, insurance, and taxes. If you purchased a home right now, next year, you might actually have equity in your house. That doesn't happen when you rent.
I Have a Lease
Your credit score falls in the good to excellent range and you saved up a nice chunk of change for your downpayment and closing costs. But you signed a lease. You have a few months left on it. Take a look at your lease agreement to find out whether there is a penalty for breaking it. Sometimes, your landlord won't charge you if the property management company can find another tenant quickly. However, even if they charge a penalty fee, the extremely low interest rates and the possibility for equity buildup may outweigh the cost of the penalty. Discuss this with your lender to make your decision about whether it's worth it.
I Might Be Moving Somewhere Else
If there is a very real possibility that you'll be moving out of the area soon, of course, hold off on buying a house. However, if you've been using this as an excuse for your cold feet, it's not a good one. In the time you "hemmed" and "hawed", you could have bought a Tucson house and already started building equity. Plus, you've probably already endured a few rental increases in that time. Time to rethink that excuse.
I'm Waiting for the Market to Change
The real estate market is cyclical in nature. It goes up. It comes down. Predicting when to expect a change to happen can be difficult...even for the "experts". You could be waiting for years. In the meantime, prices continue to rise. Interest rates might not be far behind. In the long run, real estate continues to offer a higher return than letting your money sit in your savings account. Something to ponder.
I Haven't Found the Perfect House Yet
Finally, you attend every open house you see. You seek out listings online. But you still haven't found "the one"...that perfect property that ticks off all the boxes on your list. Here's a tip for you: unless you design and build it yourself, "the one" isn't out there. Even then, you might discover that what you thought you wanted only sounded good on paper. Most likely, you'll find one that almost fits your idea of the perfect home but it still needs a few tweaks to get exactly right. That's OK. Consider it a definite possibility if it manages to hit at least 80%of your want/need list.
When you are ready to search for a Tucson home, contact me.
Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate