Did you know that, including new construction, over 6 million homes were purchased in the year 2018? That’s a big increase when compared to the 4 million homes that were sold in 2008, after the housing market crash.
Owning a home is a large part of the American dream, and is, therefore, the goal of many people. But certain misconceptions about the housing market and the home buying process prevent those same people from living that dream.
The truth? Owning a home is very much an attainable goal, especially in today’s thriving housing market.
But is buying a house worth it? And do you really need to put 20% down just to get a foot in the door?
Are foreclosures increasing or decreasing? You don’t want to buy a home and lose it a few years later while damaging your credit score in the process.
If you’re asking yourself these kinds of questions, wonder no longer, because we’re here to help!
In this article, we’ll tell you why right now is the perfect time to buy a house, as well as give you a few tips and tricks on how to do so without much of a hassle.
Now then, let’s get started!
1. The Housing Market Has Recovered From the 2008 Crash
Since the housing market crash in 2008, there has been a stigma around buying a house that has slowly begun to ebb away over time. People are growing less wary of purchasing a home, and for good reason.
Research shows that the housing market has almost fully recovered from the 2008 crash. In fact, median home prices have climbed from $180,000 in 2008 to over $200,000 today.
Redfin’s Demand Index dipped all the way down to 90 in 2014. But it was over 120 in June of 2019, a nearly 30 point increase over five years.
2. Foreclosures Are Decreasing at Rapid Rates
A homeowner’s worst nightmare is being forced to deal with a foreclosure filing. The idea that you’re not only losing your home but damaging your credit score in the process is something that every homeowner fears.
That fear can prevent you from actually purchasing a home for yourself, missing out on something you’ve always wanted in life. Well, believe it or not, foreclosures are on the decline and have been since the turn of the decade.
Nearly 3 million homeowners filed for foreclosure in 2010. That number in 2018? A little over 600 thousand, a 78% decrease from the 2010 number.
Those 600 thousand foreclosures are a 13-year low, and proof that foreclosures aren’t as big of an issue as they were over a decade ago.
3. Half of All Home Buyers are First-Time Home Buyers
As we’ve stated, buying a home can be overwhelming, especially if you’ve never done so before.
Understanding how everything works, what you need to do to get approved for a mortgage, and what you can and cannot afford, can deter people completely from even trying to buy a home.
Because of this, the idea that not many buyers are on their second or third home seems plausible. But that’s actually not the case.
In 2017, 52% of all home buyers were first-time buyers. So if you’ve never purchased a home before, and are a little afraid by the process, don’t be. Plenty of people are learning the ins and outs of home buying for the first time at the same time that you are, so you’re not alone.
4. Sellers Typically Get What They Ask For
Some people believe that, with a good real estate agent, you can talk a seller down and get a good deal on a home. While that’s not necessarily false, the idea that you can cut tens of thousands of dollars off a home’s asking price isn’t something you should rely on.
In the current market, sellers are getting nearly 98% of their asking price. So if you have the idea of talking someone down to your budget on a house that isn’t currently in that budget, get it out of your head, because it’s not going to happen.
A good rule of thumb? Don’t look at any houses that are above your budget at all. The idea that you’ll need to talk a seller down to be able to afford the home isn’t a realistic one, and thus, you should avoid that situation completely.
5. Buyers Look at Around 10 Houses Before Making a Purchase
Depending on where you’re searching, buying a home can be quite the competition. People get offers on the table in quickly, and homes often sell in just a few short days.
Because of this, some people feel the need to jump on the very first house they see, without looking at others first. Others want to browse every house available before making the decision, which can overwhelm a buyer and lead to missed opportunities.
The idea that you need to look at dozens and dozens of homes before making a pick isn’t necessarily true, or the norm. Sure, you can do that if you want, but on average, people browse 10 homes before finally settling on their dream home.
So even if you find a home you love in the first few showings, keep looking, just to confirm that you’re not missing out on a better opportunity elsewhere.
6. Buyers Look for Around 10 Weeks Before Settling on a Home
One question that home buyers often have is “how long am I supposed to look for a home before making a decision?” This is especially true for first-time buyers, who’ve never gone through the process before.
The truth is, it really depends on your situation and can vary a great deal between buyers.
Your timeline will depend on a variety of things, like the housing market in your area and how quickly you need to find a home. But on average, buyers look for around 10 weeks before finally settling on a home to buy.
So, if you’re getting ready to buy a home, remember the 10’s (10 homes in 10 weeks). Don’t feel too pressured to strictly follow that guideline, though. Everyone’s situation is different.
7. Almost Half of All Buyers Found Their Home on the Web
It’s safe to say that the internet has completely changed the way we do everyday tasks. So it’s no surprise that buying a home has also been greatly affected by the internet.
Almost 50% of home buyers end up buying a home that they found online, using sites like Zillow to locate homes that are available in their area.
Out-of-state moves have also increased, thanks to the internet as well. The idea of moving to Auburn, AL while living in Detroit, MI is much more plausible now that you can visit homes virtually anywhere at any time.
8. You Don’t Need a Large Down Payment to Own a Home
No, it’s not true. You don’t need to put down 20% to own a home, so don’t let that scare you away from making the leap. It’s not feasible for a lot of people to save that much money up for a down payment, and because of this, they stick with renting.
You don’t have to rent if you don’t want to, and it doesn’t take a ton of money down to get your foot in the door of your very own home.
Sure, you’re going to need to put down something, depending on what kind of loan you eventually get approved for. But you can get approved for loans and put down as little as 3% and still receive the keys to your new home no problem.
9. The Costs of Renting vs. Owning
In most cases, the idea that a mortgage is more expensive than rent simply isn’t true.
And it’s safe to assume that you’ll have more than one bedroom to work with. So if you’re looking for more space or a yard, you can afford to do so without needing to ask for a promotion at work.
Is Buying a House Worth It? Yes!
Well, there you have it! Those are some surprising statistics about buying a home in today’s housing market. As you can see, the answer to the question “is buying a house worth it?” is a resounding yes!
Remember, you don’t need a huge down payment to own a new home. Also, if you’re a first-time buyer, don’t be alarmed, over half of all buyers are new to the process, too.
So stop throwing all that money away on rent and get out there and find the home of your dreams! And be sure to check out our blog, where you’ll find more tips and tricks on how to buy a home without all of the hassles.