Is it the right time to buy a house? Real estate agents, experts weigh

Here is a fact that you can find comforting or dismaying: even a housing economist cannot say if it’s the right time to buy a house.

Chen Zhao, head of research in economics at the Redfin popular real estate market, always tries to understand it by itself. When I called Zhao recently to make him pass the American real estate market, she had just spent the morning visiting a house in Manhattan. Leaving the apartment, she ended up with a rodent question.

“I said to myself:” Should I buy a house right now? “,” Said Zhao. “The answer is complicated.”

It is a strange moment for buyers – even those armed with doctorates and gusts of housing data. Mortgage rates have recently increased after slipping for several months, pouring cold water to dreams of cheaper monthly payments. President Donald Trump’s prices have plunged the economy into chaos, and recession fears are back with revenge. It is not surprising that people guess the home purchase diving when they feel trembling about their stock portfolios or, more importantly, of their work.

Although this is a particularly bad moment to be a buyer in some respects, there are green shoots. With the number of houses for sale upwards, house hunters have more options they have had for years. The prices of houses are flattened, offering a certain relief to buyers. And traditional prints of home ownership – stability and comfort of a place to call yours – have not gone anywhere.

“I think these advantages still exist,” said Nick Gerli, the founder and CEO of the real estate analysis company. “The question is:” Do financial mathematics make sense? “”

For the second episode of the series in six parts of BI on major life decisions in periods of uncertainty – the first piece was covering best practices to start a business – I tried to answer the question of whether it’s the right time to buy a house. I spent weeks speaking to real estate agents and accommodation economists to build a framework for reflection through the current dilemma of home purchase.

It is impossible to answer the question by wide features, of course, because real estate is local and reality in the field can differ significantly from one market to another, but the initiates with which I spoke for the most part have suggested to wait. That said, many people have to move and cannot expect a better economy. In these cases, there are still means for buyers to come in advance: they can take their time, haggle the price of the home and put pressure for other concessions such as repairs or additional money for closing costs. Here is a roadmap to sort the waste which is our current real estate market.

Challenges for house buyers

There is no sugar reality for potential buyers: the image of affordability is dark. The prices of stickers for houses are always raised around most of the United States, the median selling price increased by almost 43% of the start of the pandemic, according to Redfin data. The other consideration of major costs – the typical rate of a mortgage – plays an undoubtedly more important role in their use of people. After reaching a climb in 2022 and 2023, the average rate of a 30 -year mortgage dropped last year to a low almost 6%, which allows buyers to stretch their budget more easily and to agitate the hope that more people would move during this year’s house purchase season. But that should not be: economic turbulence propelled the average rate of a mortgage at around 6.8%. The consensus among the people with whom I spoke was that if the rates can lower their current levels, it is more or less the new normal – the days of ultra -hypothèque importance are completed.

This leaves buyers in a difficult position. The median house now costs around $ 360,000, according to Zillow data. The typical American household should spend more than 35% of their monthly income to afford payments on such a house, assuming that they have already paid a deposit of 20%, or about $ 72,000. This is particularly disturbing because anyone who came out more than a third of their gross income on housing is generally considered to be “financially embarrassed”.

The cracking of the data from Gerli brings the mortgage payment / income ratio closer to 39%closer to the height of the height in 2006, near the peak of the housing bubble. “Many people cannot even be eligible to buy a house, and if they can, it is at the upper end of their budget, and they feel really stretched,” explains Gerli. He swallowed the home purchase calculation at a biller: “To be perfectly honest, it is a gross affair on most markets.”

This raises the question: rent a better good deal? With many new buildings of buildings opening their doors in the United States, the situation for many tenants has actually improved – apartments today are more likely to see concessions such as a month or two of free rent, and owners are mainly focused on maintaining tenants in place rather than rents. Admittedly, Zillow found that the median cleaning of tenants still spends 29.4% of its income in the accommodation, to make the line of the accessibility threshold. But the tenants do not have to bring together a deposit, and they generally pay less rent every month than they would do for a mortgage, insurance, hoa costs and the strange dishwasher or roof repair. Many people can naturally be attracted to rental given cost compromises and economic anxiety, “said Zhao.

“The prices of rents are quite cheap compared to mortgages or purchase prices at the moment,” said Zhao. “And the rental has the advantage of giving you flexibility, not to attach all your capital in one place. If your economic situation changes, you can extend or evolve more easily in a rental.”

How buyers can still win

OK, but let’s say you can afford to make these payments at home while leaving you a little breathing. Or maybe you just have to move for life reasons: you get a new job, get a child, get married (or divorced). The next thing you need to consider is the length of your stay. Placing money in a house in which you can only stay only a few years, with a floor plan, you are forced to exceed quickly, or in an area of ​​which you feel worried, may not be a good idea at a time when so many things are constantly evolving. Zillow recently declared that he expected the prices of houses to drop 1.7% over the next year, a net reversal compared to its prospects in January, when the company has planned prices of almost 3% in the following 12 months.

Rooming to secure a place that is only a resort in such a way to something larger or better could signify selling at a loss of the road. But the more you stay there, the more you can resolve the reflux and the flows of a market to your advantage. And given the potential for clasping prices, buyers who are not in a hurry to make an immediate purchase may prefer to wait for their time.

Despite the challenges of affordability and general tumult, buyers have certain factors in their favor. With a larger pool of houses to choose and sellers more willing to reduce the prices of stickers to conclude a case, house buyers can afford to take their time and bend negotiation muscles. There were almost a million houses on the market in April, about 31% more than at the same time last year, found Realtor.com (it’s still down around 16% of pre-pale levels, but hey, it’s a start). And around 18% of the houses listed on the site have undergone a price drop in April, the highest share for this period of the year since at least 2016. Buyers of the country will not benefit from this change equally, of course: the inventory is generally higher in the south and southwest, also known as the belt of the sun, where house hunters are higher in more electricity.

Conclusion: Buy the tour for practically everything. Shake the trees to find the best rate on a mortgage, or perhaps seek a supposed loan if you want to mark one of these rates of 3%. Some buyers also find agents who will work for less than the typical commission rate, saving thousands of dollars and using lower costs as additional negotiation currency with sellers.

The word on everyone’s lips at the moment is “uncertainty” – almost the last thing you want to hear before doing what is probably one of the biggest transactions in your life. But the data and advice with clear eyes of these experts offer regular hand in trembling times. And if you damage all this unprecedented – well, you are not alone.

“We are operating in a different world at the moment,” said Zhao. “Everything before it seems quite picturesque.”

James Rodriguez is a main journalist for the Business Insider speech team.