The jump from renting to buying is a huge milestone in life. Ever since the Subprime Mortgage Crisis of 2008, trends and predictions have flowed about who will buy, when and if Millennials will buy, and how long it will take the market to settle back down. Those interested in buying or renting out property in 2017 will want to look at the financial forecast of the housing market for the coming year. Experts in economics have predicted an overall steady housing market for the next year. While the close of 2016 should not be majorly affected, trending housing demands, the beginning of President Trump’s term, and a hike in interest rates will likely create a slower but still rising year. As always, whether you buy or rent will depend on a few factors, including your age, financial situation, and distance you are willing to move. Here are a few tips as well as explanations of the market predictions that will help you determine whether you should rent or purchase a unit in 2017.
- Consider Your Location to Buy. Ask yourself: Where are you willing to move? Housing price is all about location, location, location. Some cities are seeing higher demand and rising home prices while towns on the fringes slowly develop. If you are looking for a home in a particular area, it is best to consult an experienced realtor in the field who knows the area. Many people find realtors through word of mouth, but there are also websites that will match you with a realtor. A realtor who knows the area will match your needs with the best prices and will be able to give you financing tips that will suite you. If you are more open to locations out of the city or state, you might find more prime options. Housing markets in cities like Denver, Colorado; Seattle, Washington; Richmond, Virginia; Tampa, Florida; San Diego, California, and many more are attracting investors and might be good options to find a home. If you are willing to move out of state, research different cities to determine which lifestyle is right for you, and whether the job market is growing or stable in your field of work (unless you are flexible on that term).
- Stick to a Budget. The 2008 Subprime Mortgage Crisis sobered up the public as well as the banks and federal government about affordability. If you feel in over your head about mortgages, fixed interest rates, and what your monthly budget can sustain in this rising market, then it is wise to consult with your realtor. Again, a realtor should be able to simplify the terms based on your income and expectations. It is easy to fall in love and romanticize your life in the beautiful new home you just saw, but don’t be fooled: if it is out of your budget along with your other monthly expenses, you need to keep looking. Your local bank can also advise you. They can inform you on what they can lend you at a certain interest rate.
- Consider the Financial Risk. Once you already know your budget, you can create a more accurate assessment on whether you should continue to rent or buy a home. It will not be worth it to buy if you are not financially secure. Although it is predicted that home buying will rise in 2017, that does not mean you are ready. It is predicted that Millennials, for example, are likely to settle down in large numbers in the coming years, but that does not define your individual needs at this moment. Some people fear that if they continue to rent, it may be a poor investment decision. But in the end, it may actually be the best in the long term.
- The Benefits of Renting. Since the Recession, young people have become more mobile and more educated. Renting means that at the end of the lease you can choose to leave on a whim. If you are not financially able to own a house, that doesn’t mean you are not financially stable enough to travel or relocate. The flexibility that renting offers can allow you to try different lifestyles or adjust in case you lose or try to change your job. Eventually, when you are financially prepared and satisfied with the pros and cons of the area you wish to live, then the time to settle down will come. However, do not pressure yourself—all things come in good time. If you do choose to rent, be wary of fraudulent schemes; with the rise in tenancy, con artists have jumped on the bandwagon. When a prospective landlord asks for your social security number and other important information, make sure they’re running their credit check through certified companies like Transunion SmartMove services. This will help you avoid scams and keep your personal information protected.