Is NOW a BAD time to Buy a Home?
But don't take my word for it, If you don't own your home please read on!!
Of course, your neighbor, you mailman, anyone watching the news, and (insert anyone except a qualified professional here). That type of bold and irresponsible statement is exactly why many people do not have the opportunity to become home owners and build true wealth/safety/support for their family. Please allow me to explain.
The real estate market is NEVER and I repeat NEVER!! good for everyone. The last 5 years specifically, and the mid 2019's to early 2022's especially were great markets for wealthy persons, high - income home buyers, people with their down payment funds gifted to the, and anyone else starting from a traditionally advantaged launching position for their home search. This is the first market we've seen in close to a decade that is great for the average person.
Interest rates are around the mid %5's as of this article being posted, and have only been under 6% for the last 10 years. Prior to that period buyers were regularly considering alternative loan options to the standard 30 year mortgage. People often suffer from a selective long and short term memory, especially when it comes to buying a home. It was very common to have the seller buy down the rate, get an adjustable rate loan, an interest only loan, or some other combination where they would have a higher rate for a few years until it became the right opportunity to refinance into the standard 30 year amortized loan. This is a very NORMAL process to do if you want to own a home and subsequently build wealth through it as 5-10 years after you buy you will be sitting on a much larger sum of money in equity and appreciation of the home's value than what you paid in short term monthly costs.
Right now there are down payment assistance programs paying up to 4% of the purchase price and closing costs for you with a qualifying credit score. This means you could get a conforming 30 year loan with 5% down + closing costs (2% of the purchase price) and only need to ACTUALLY have 3% of the purchase price in your bank account to use to buy the home. The seller can also credit you for closing costs, or a rate buy down which will result in any of your 3% deposit that is left over being returned to you after close of escrow.
When you also take into account that their are properties sitting on the market over 30-90 days right now in Los Angeles & Orange County with no offers. This is the first market in over 5 years that you could get a reduced purchase price of 3-5% (which would cover any additional costs of the higher initial monthly payment), get some of your down payment and closing costs paid for by the lender, and possibly better terms/repairs/credits from the seller all at the same time. Doesn't this sound like a better time to buy a home than when you had to offer an additional $50k in cash above the asking price just to be included in the counter so that you can cover the difference in the home's appraisal value to your offer's value? There was a period in time where offer blow 20% down wouldn't even be looked at between 2019-2022 because they were less reliable and there were too many other great offers. Possibly even some cash offers.
This market is THE BEST MARKET for all the people that just can't compete on price, don't want the bidding wars, have trouble saving the down payment despite having good income, have low down payment loans or anything that wasn't accepted as the standard for most of the last 5 years.
Remember, owning your home + time (equity & appreciation) = wealth that can provide true freedom and solutions to help with medical bills, college funds, traveling expenses, investing in more homes or retirement funds. No one can do the few hours of prep for you. Reach out to me, discuss your options, and get connected with the best loan options to learn the whole picture of what you could qualify for in the real estate market. Time is the biggest factor, buying any good home right now will help you more than buying the best home at the perfect time 5 years from now. Waiting usually costs you having to buy at a much higher price with much less time to grow that wealth and possibly still having to compete with multiple buyers.
Message me if you have any questions / concerns. There are no obligations and I am looking forward to assisting you to achieve your real estate goals in any way possible.
