Deciding when is the best time to buy a home is one of the most momentous financial decisions most people can make in life. Having your own roof over your head provides security, long-term equity and tax benefits, but buying a home also implies a large investment and a financial commitment for years to come.
So how do you know when is the best time to buy a home? Below we review the key factors to take into account to detect the best time to buy a home.
Factors to know which is the best time to buy a home
The real estate market: supply, demand and prices
A crucial aspect is to analyze the current housing market conditions and how they are projected in the medium term, so we must study:
Real estate supply.
A market with a shortage of available supply means there is more competition among buyers, potentially rising prices and less room for negotiation. However, if there is a growing inventory of properties for sale available, it is a market signal in favor of the buyer.
Demand and sales
Equally as important as supply is sales. A lot of demand and properties selling quickly indicates a “hot” market. But if we see stagnant demand and stagnant homes for sale, it signals that the market is “cold,” making it more favorable for buyers.
It is important to review price trends. If they have been steadily rising for months or years, it is an indicator that a correction is coming, so buying is not recommended. But if they remain stable or have been recently corrected, it is not a good time to buy.
Looking at the forecasts of real estate guilds and analysts about the future market decision will give you a more informed view to make the decision. By being clear about the outlook, you will avoid buying at the peak of a high cycle or when a real estate bubble is approaching.
Personal finances: buying power
Beyond market conditions, personal financial reality is a determining factor in identifying the right moment. Review these aspects in order to make the right decision:
The down payment is usually at least 20% of the value of the property, so evaluate if you have that amount saved or the ability to put it together in the short term. Until then you will not be in a good position to purchase a new property.
It should also be clear that the estimated amount of the monthly mortgage payment has to be within the current and expected future budget. In planning for the costs you should include potential increases and a margin of maneuver for emergency situations.
Stable salary and income
Experts recommend having at least 2 years with a stable income and good job projections for the future before getting into a mortgage to be paid between 15 and 30 years term.
It is vital to have a good credit history, with no outstanding debts, to be able to access a mortgage loan on favorable terms. To do this, also consult the different mortgages that exist to see which is the best one that adapts to your conditions.
It is advisable to seek financial advice, either with your bank, a financial broker or a trusted private individual, to comprehensively evaluate your particular case. If your financial capacity is appropriate, it is an excellent sign that you are at the right time to take the plunge.
Neighborhood and property
Finally, it is key to choose a good location and a property in optimal conditions, analyzing the following aspects:
It is important to look for a property in an area or district that has a projection of greater development in the next 5 – 10 years, so that the investment can be revalued and future benefits can be obtained with the property.
Proximity to public services
Try to have the property close to schools, parks, supermarkets, hospitals, subway and bus stations. The more services available in a relatively close area, the better.
Condition of the property
Before buying a home, thoroughly examine the condition of the property to rule out future costly repairs caused by hidden flaws.
By following all these tips, you will be able to determine the best time to buy a home, both considering market cycles and financial situation. With an informed decision, you will make the move to property at the best possible time. If you are looking for a real estate Fuengirola, 1 mast is the best choice.