DETROIT – For many, as families get together, it becomes obvious the space they have to celebrate just isn’t enough anymore. It could also be that young buyers are tired of having Christmas in an apartment. But it is a tough market out there and finding a home you can afford is difficult these days.
Let’s take a look at how to make it so your holiday celebrations are different in a much happier light.
For those who remember the 1980s, today’s housing market isn’t nearly as bad as the bad old days, but that’s no comfort for those who yearn to have a home of their own.
Certified Financial Planner and CEO of Planning Alternatives Nathan Mersereau said this housing market puts everyone in a strange spot.
“A lot of people who had planned on buying a house, now have put their plans on pause because some of these mortgage rates are much higher than they anticipated,” Mersereau said.
Many who might sell don’t because they need a mortgage for the next home and the cost is prohibitive, so fewer homes sell, but, in a sad twist, the prices have stayed high.
Yet, former Realtor and Certified Financial Planner Rick Kahler said buying a home is a difficult thing to market time and that you can’t worry about current market conditions.
“Buy when you need a house,” Kahler said. “And buy the amount of house you can afford.”
What it comes down to is thinking of a home as less of an investment and more of a personal use item -- and one you need to make a priority, so working toward a downpayment needs to become a New Year’s goal.
Kahler suggests taking a look at your budget and trying to find a way to set aside enough to come up with a 10-20% down payment.
“A lot of people want to make quick decisions or impulsive decisions that may or may not be in their best financial interests,” Mersereau said. “So the first thing is to outline a plan -- where do you want to live, what type of home do you envision being, what would fit for your lifestyle, and then look at the financial aspects and make sure that you’re marrying your personal choice with the financial reality for what’s available to make that decision.”
It is possible to get into a home without a monstrous down payment, but you have to go out and find that for yourself.
“There are some plans in there, usually state-specific, where you can put down less in some cases as little as 3%,” Kahler said. “Get an appointment with a loan officer, a mortgage lender, or some type to find out what the options are in your area.”
One last word of caution for those who say they’ve decided 2024 is the year they will buy that house: Make certain you don’t spend down every last bit of cash you have. Unless your home is brand new, there will undoubtedly be unexpected expenses and your emergency fund needs to exist for that purpose.