In June, housing starts fell by 12 percent—a sign that prospective buyers are becoming more hesitant toward rising housing costs and shrinking inventory. SmartAsset, a finance company, has been tracking this trend and offers advice for buyers as it continues to evolve.
Offer these tips for your buyer clients trying to break into what can be a challenging housing market:
- The market doesn’t dictate how much you can afford. The market may change, but buyers should resist temptation to allow their budget to change with it. Determining how much house you can afford ahead of time is a step all buyers should take, but it’s important to stay true to that figure.
- Are you better off renting? Renters often view homeownership as the light at the end of the tunnel—a monthly payment that actually builds equity in something—but market conditions may not be favorable for everyone looking to enter the market. If you find that the cost of renting beats buying over the next few years, it may benefit buyers to wait until market conditions are more favorable.
- Expected mortgage payments can change. With housing becoming more expensive, it’s important to monitor how your down payment will affect your monthly mortgage payments. Using a tool like a mortgage calculator can help show far that down payment will go and how the monthly payments will be affected over the life of your loan.
Source:
SmartAsset (July 2018)
