Common Questions Home Buyers Ask
Here are the common questions that home buyers ask in 2023:
- How Do I Afford a Home? Many homebuyers are concerned about rising home prices and whether they could afford to buy a home in their desired location. Low housing affordability can be a significant barrier to homeownership. As interest rates go down in the next year or so, home prices and competition will go up quickly.
- Should I Buy a Home When Mortgage Rates Go Down? Interest rates on mortgages are a concern. Homebuyers typically watch interest rates closely, because they can significantly impact the cost of borrowing and monthly mortgage payments. Realtor Nathan Walldorf says, “You need to date the rate and marry the home.” You can buy a home now and refinance when rates go down in the next few years.
- How Do I Find a Home When Inventory is Low? In some areas, there is a shortage of homes for sale, leading to increased competition among buyers and rising prices. Lack of inventory makes it challenging for buyers to find suitable properties. the lack of inventory is not going to change any time soon. Find a Realtor who is willing to make calls for you to find homes that are not on the market. That could create more options for you.
- How Do I Buy a Home When Competition is High? Fierce competition from other buyers makes it difficult for some to secure a property, especially in highly desirable areas. Luckily, it is a little less competitive than in 2021 and 2022, but you still have to act quickly to avoid competition to your offer.
- How Much of a Down Payment Do I need? Saving for a down payment can be a major concern for first-time homebuyers, as they aim to accumulate the necessary funds while dealing with other financial obligations. There are many different down payment options right now, so ask your Realtor what is out there. You can even get a conventional loan for as low as 3.5% down. There are other 100% financing options but they can be income limited or area limited.
- How Do I Build My Credit? Buyers are concerned about their credit scores and whether they would qualify for a mortgage with favorable terms. Make sure you have some credit. Even if you need to charge 1 tank of gas per month on a credit card and pay it off every month, that will build your credit.
- What If the Home I Might Buy Has Problems? The condition of the property and potential maintenance or repair issues are concerns for buyers. Buyers want to ensure they aren’t purchasing a home with hidden problems. That is what your home inspection is for. It will protect you from buying the money pit.
- Can I Afford the Location and Amenities That I want? Proximity to work, schools, and amenities is a significant concern for many buyers, as they want to find a home in a convenient location. Ask a Realtor what areas fit your budget. Most people do not stay in one home forever. You can always move up and into a better or different area in the future.
What is going to Happen to the Real Estate Market in the Coming Months? Buyers were also concerned about the future of the real estate market. They wanted to make sure they are making a sound investment and that the value of their home will appreciate over time. We have a shortage of inventory compared to household formation, so home values will not be decreasing any time soon. Lenders have been making conservative loans since 2010, so people can afford their mortgages. People also have equity in their homes, so a market crash is not coming any time soon.