Tips for Frustrated Home Buyers
Housing shortages across the country can make home buying ferociously difficult. That frustration is especially acute for first-time buyers, said Senior CFP Board Ambassador Jill Schlesinger, CFP®.
“The biggest hurdle for the housing market in the middle of 2017 is low inventory,” said Schlesinger. “Housing starts, housing permits, new home construction and pending home sales have all slowed this summer. This all adds up to fewer options for those looking to buy a house, especially for the first time.”
Prices have increased by 40 percent in the last four years, according to the National Association of Realtors. Meanwhile, incomes are up only 10 percent over the same period. Americans may feel more confident in their economic future – but as they head out to buy a house, they are coming up short when it comes to taking one of the first steps toward the American dream, Schlesinger said.
It is possible to keep a cool head in this hot market. Schlesinger offers the following tips and others for home buyers pounding the pavements.
- Run the numbers: Understand how much home you can afford to buy and whether home ownership might preclude you from addressing other important financial issues in your life, like paying off debt. A CERTIFIED FINANCIAL PLANNER™ professional can help you understand how your housing choices can support your overall financial plan.
- Start the mortgage process/correct credit report mistakes: If you have not done so in a while, go to AnnualCreditReport.com and request your free copy. It’s important to correct any errors on the report before you start the mortgage process.
- Conduct research: Even if you are working with a realtor, check out new listings and spread the word throughout your network. You never know who might be about to list a home.
- Keep your emotions in check: Even with limited supply, there are a lot of houses out there. Be careful not to blow through your budget or put yourself in a position where you own two homes.
To buy the house of your dreams in this environment, you may need to save more, look longer and be alert to unexpected opportunities.