Now is a really good time to sell your home. Not only is inventory limited to reduce competition, but homes are flying off the market at a tremendous rate.
In July, a typical home was on the market for 38 days, Realtor.com reported. In contrast, in July it took an average of 60 days to remove a house from the market.
But that’s not the only reason sellers are now in an advantageous position. Household values are also growing. Last month, the national average listing price rose to $ 385,000, up 10.3% from a year earlier.
Now, depending on your home buying budget, $ 385,000 may be more than doable. But what if you’re not sure? Or what if that’s not what the homes in your area are for? Here’s how to find out if you can afford a purchase or if it’s worth waiting for prices to drop.
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How much can you afford to spend on a home?
As a general rule, it is a good idea to ensure that your monthly housing costs do not exceed 30% of the salary you receive. And under monthly expenses, we are talking about predictable expenses, which include:
After you have accounted for all these costs, you can use mortgage calculator to find out how much home you can afford based on the amount of the down payment you have and the interest rate you think you are entitled to. You can check this betting page for up-to-date information on current interest rates.
You should also be aware that if your credit rating is in the medium to above 700 or higher, there is a good chance that you will be competing for the most competitive rates that mortgage lenders in your state offer. But if your score is lower – say, around 600’s – you may be stuck with a higher mortgage interest rate. And this can reduce purchasing power.
Should I buy now or wait?
Housing prices have risen dramatically over the past year, and one of the main reasons is the very low inventory levels. Whenever there is a shortage of a particular product, demand tends to skyrocket, and prices tend to follow suit. This is what is happening in the housing market today.
If you find you can afford a home in an ideal area, you have no reason not to buy a home this year, especially since mortgage the rates are so competitive. But if you cannot afford the home you really want to live in, then you should postpone your search and wait for new properties to appear on the market.
Remember, just because the average home price is $ 385,000 does not mean that the home will be worth in the areas you are considering. You may find that the prices where you are looking are much higher or lower. Use this information, as well as the numbers you get, to make a decision.