US housing market, would you buy now?

[JustinHEMI]

I'm asking this just as a general discussion, there's a breadth of experience and knowledge on this site.

I'm fixing to move for a job soon and my current house is one of those under a 3% mortgage and I'm now faced with deciding to buy again or rent for a while.

Looking for thoughts on that considering the current rates and market.

I'm leaning buy, but anything else I should consider?

Thanks!

Justin

[nerdogray]

If you can afford the rate, why not? You can always refinance later (if rates ever go down). Most rentals I've found have bumped up their pricing to be just shy of buying a home at current rates. How coincidental, no? I was right in the middle of financing a home with closing less than 30 days out and got cut, so needless to say that was scuttled. Fortunately, the builder gave me back my $10k deposit, though they were under no legal obligation to do so. Frankly, I was blown away. With a 3% loan on your current, I'd imagine there is going to be a lot of recommendation to rent out your current home and mortgage another. However, I'm a person of simplicity, and with current laws heavily in favor of NOT protecting landlords, I couldn't do that.

I would have ended up with around 7% if everything had gone through, and that included a small buydown. Though, I'm not too fond of the whole "buydown" concept, because it seemed to me you're just prepaying the equivalent points taken off.

[gameson]

one thing you need to remember

you can ALWAYS refinance your rate
BUT
you can NOT renegotiate your price once you buy

[JustinHEMI]

Both good points and I'm not interested in renting out my current home. For the area I'm moving to, even if things slow down, I don't expect housing prices to "crash," which is what has me leaning towards buy now, refinance later.

[spazzyfry123]

I close on my new construction tomorrow. Home is actively being built. Much lower rate than current without buying points. I suggest working with a credit union; they are often portfolio-based loans that offer negotiation opportunities on the rate.

I would be renting a far inferior home in a far inferior area at the same, if not higher, monthly expenditure as my custom home I am building. Sure, more upfront cost, but it all goes towards holding and building equity on a large asset. Renting goes to someone else's portfolio. There are certainly instances in which renting may prove to be beneficial (like me actively renting a place while we build the home as an example), but assess your situation and execute. No sense in trying to "time" the market. Home values shouldn't significantly depreciate from current, and interest rates will likely hover in this general area for some time.

[tturedraider]

Originally Posted by JustinHEMI

I'm asking this just as a general discussion, there's a breadth of experience and knowledge on this site.

I'm fixing to move for a job soon and my current house is one of those under a 3% mortgage and I'm now faced with deciding to buy again or rent for a while.

Looking for thoughts on that considering the current rates and market.

I'm leaning buy, but anything else I should consider?

Thanks!

Justin

“Fixing to”, I’m guessing you’re not from PA originally. As a Texan I’m inclined to guess you are, too.

Originally Posted by nerdogray

If you can afford the rate, why not? You can always refinance later (if rates ever go down). Most rentals I've found have bumped up their pricing to be just shy of buying a home at current rates. How coincidental, no? I was right in the middle of financing a home with closing less than 30 days out and got cut, so needless to say that was scuttled. Fortunately, the builder gave me back my $10k deposit, though they were under no legal obligation to do so. Frankly, I was blown away. With a 3% loan on your current, I'd imagine there is going to be a lot of recommendation to rent out your current home and mortgage another. However, I'm a person of simplicity, and with current laws heavily in favor of NOT protecting landlords, I couldn't do that.

I would have ended up with around 7% if everything had gone through, and that included a small buydown. Though, I'm not too fond of the whole "buydown" concept, because it seemed to me you're just prepaying the equivalent points taken off.

My initial thought was not to buy, but I changed my mind with the first sentence here. If you can afford the rate, why not?

[p0p]

If was to sell the current house I would only put 20% on the new house; so I don't have to pay PMI. And keep the rest in the bank or under my bed.

Then/when the rates goes down refi and then put $$$,$$$ towards the principle

[B58-M340iX]

Rent = 100% interest
Buy = xx.xx% equity in principle + xx.xx% interest

You'd likely gain more in principle than you'd save paying rent (if under a mortgage payment), so ultimately you net more in your corner even if rates are high. I've tried to tell a family member this as they continue to rent for $2k/month because house prices and rates are high. $2,000x12=$24,000 burned in a trash bin, when it could have been $3,000mo ($1500 principle + $1,500 PTI) on a 15-year example. At least they would have some benefit even though the payment is higher. Obviously, scale those numbers down for lower-cost homes or larger down payments.

[JustinHEMI]

Originally Posted by tturedraider

“Fixing to”, I’m guessing you’re not from PA originally. As a Texan I’m inclined to guess you are, too.



My initial thought was not to buy, but I changed my mind with the first sentence here. If you can afford the rate, why not?

I'm actually from PA but preparing to move south, so practicing.

[F32Fleet]

Originally Posted by JustinHEMI

I'm asking this just as a general discussion, there's a breadth of experience and knowledge on this site.

I'm fixing to move for a job soon and my current house is one of those under a 3% mortgage and I'm now faced with deciding to buy again or rent for a while.

Looking for thoughts on that considering the current rates and market.

I'm leaning buy, but anything else I should consider?

Thanks!

Justin

Depends on how long you intend on living there and family situation.

[tturedraider]

Originally Posted by JustinHEMI

I'm actually from PA but preparing to move south, so practicing.

When you hear yourself say, “‘Are y’all fixin’ to’ do this or that?”, you’ll know you have become a southerner. Or when you make y’all possessive. “How’s y’all’s weather?”

[M-technik-3]

Not now way but _____ no way. My current Mortgage is 3% why sell my home make a some money only to buy a house that is double what I want to spend and add to insult is 5% higher interest.

We are waiting.

[JustinHEMI]

Originally Posted by M-technik-3

Not now way but _____ no way. My current Mortgage is 3% why sell my home make a some money only to buy a house that is double what I want to spend and add to insult is 5% higher interest.

We are waiting.

That's cool, but I'm moving.

[floridaorange]

I think prices will come back down more for sure over the slower winter months. I’d wait to buy personally - but it also depends on what neighborhood and what market.

[M-technik-3]

All numbers from economists have us heading into an a recession. Folks are stretched to the limit, auto loans in foreclosure soon it will be housing.

That will kill inflation! Dropping demand and then only then banks will start lowering interest rates.

Best of luck with your move.

[chassis]

Originally Posted by JustinHEMI

I'm asking this just as a general discussion, there's a breadth of experience and knowledge on this site.

I'm fixing to move for a job soon and my current house is one of those under a 3% mortgage and I'm now faced with deciding to buy again or rent for a while.

Looking for thoughts on that considering the current rates and market.

I'm leaning buy, but anything else I should consider?

Thanks!

Justin

Do you have kids at home?

[JustinHEMI]

Originally Posted by chassis

Do you have kids at home?

No.

[chassis]

Originally Posted by JustinHEMI

No.

I would rent. Home prices are not meaningfully lower now, and may not trend lower for years to come. Interest rates are high, these will come down but no certainty when. High price, high financing cost = not a good time to buy.

In the mean time, renting allows flexibility (via lease length) and zero or near-zero maintenance.

Financially, I have crunched the numbers dozens of times, and conclude that rent vs own is not materially different, with two conditions:

1. you are talking about your own principal dwelling (not an investment or income-producing property) and

2. you are not living in a cartoonish real estate market like NorCal, NYC, Miami or a handful of other atypical real estate markets

If you are living in Anywhere USA with no kids, rent vs own is near enough a break even proposition financially.

You have no kids at home, so school district is not of particular importance. Kids at home changes the equation in my view and in my experience.

[JustinHEMI]

Originally Posted by chassis

I would rent. Home prices are not meaningfully lower now, and may not trend lower for years to come. Interest rates are high, these will come down but no certainty when. High price, high financing cost = not a good time to buy.

In the mean time, renting allows flexibility (via lease length) and zero or near-zero maintenance.

Financially, I have crunched the numbers dozens of times, and conclude that rent vs own is not materially different, with two conditions:

1. you are talking about your own principal dwelling (not an investment or income-producing property) and

2. you are not living in a cartoonish real estate market like NorCal, NYC, Miami or a handful of other atypical real estate markets

If you are living in Anywhere USA with no kids, rent vs own is near enough a break even proposition financially.

I am starting to lean more towards renting for a year. I'd be moving to the Nashville area. Give me time to get to know the area and where I want to live. Plus, this job has the potential to have me move again in under 5 years so, those things are making me think about renting to see what happens for a year first.

[ASAP]

It depends on your situation... I am looking to buy a house right now in a market that is completely dead in terms of sales. However, everything that is being listed is junk overall... the good homes are overpriced and sitting... where this goes in the winter as sales fall off a cliff who knows? I think the market is still way overpriced for what it is.

Basically my realtor has told me there are a few types of buyers now-

1) The cash buyer that buys for themselves... this is about the most rare buyer.
2) The low down payment buyer... this buyer will veer towards new construction in unfavorable areas because they can't afford more downpayment and need better rates even at a higher price point. This is extremely ironic but true.
3) Myself - a buyer with a need for a home who has a lot of money to put down and can easily stomach the high rates. Again, a very rare buyer these days.

Here are the buyers that don't really exist anymore-

1) Investment buyers - the roi on homes with interest rates are terrible now so you won't find this buyer.
2) the buyer who sold his home and is looking to buy a different one - why when rates are so terrible? Only if a move is necessitated, this sounds like you.

[nerdogray]

Originally Posted by JustinHEMI

I am starting to lean more towards renting for a year. I'd be moving to the Nashville area. Give me time to get to know the area and where I want to live. Plus, this job has the potential to have me move again in under 5 years so, those things are making me think about renting to see what happens for a year first.

Right now, I live about 20 miles south of Nashville but have lived all around, including downtown. Living downtown was pretty cool, and I'm an introvert. There are tons of new rentals that have sprung up in downtown and midtown (and everywhere else really) if you're looking for apartment living. Single-family homes can be had for renting, but you're looking at a serious premium unless you get something a bit out distance-wise. I will never, ever rent an apartment again unless it is reinforced concrete. I have had WAY too many bad experiences with noise and smoking. I was told that unless a building is over seven stories, it will likely be wood frame... meaning noise and smoke will be way worse. That being said, the next place I rent will likely be midtown or downtown area unless I find a small single-family home or end-unit condo with a layout that doesn't put my bed right up against my neighbor's on either side of the wall.

I'm really curious as to your new job. I just got cut from mine of 5.5 years. Maybe I should apply to your new company. Nashville is a hub for healthcare IT, which is pretty much where I've been for the past 10 or so years. Everything is getting offshored. Optum/UHC acquired Change Healthcare and is on the way to completely destroying it. All they wanted was the data and managed to convince the DoJ otherwise.

[XutvJet]

I don't see rates dropping much at all and we're years, maybe a decade, away from seeing 3-5% rates again. At the surface, buying a house with a 8% mortgage seems nuts BUT I remember buying my first house back in 2000 and 7-9% rates were common place. It's funny just how accustomed we've all become to these artificially low rates.

I am not all in favor of renting unless you've just sold a home and are looking to buy or are building or simply don't have the means to put down a big down payment (20%+).

We paid off our home back in 2013 and have been looking for the last 3 years, but got out-bid a number of times because people would pay stupid money above asking. We were going to do that. We have the money to buy what we want without a loan BUT hardly anything is on the market now Weird times. I fully expect a number of homes to come on the market in the next 6-12 months as people have been living well beyond their means for years and the money is drying up. Layoffs are ramping up too. It's all just a cycle.