Understanding Your Local Housing Market
By understanding the housing market, you’ll have a better sense of what, where and when to buy.
Buying a home is an important lifestyle and investment decision.
You want to buy at the best price possible. You want your monthly payments to be as affordable as possible. You want your home to increase in value as much as possible.
To make sure all that happens, it’s important to look beyond your individual purchase before you buy. You need to look at larger market conditions. What’s happening around you (house price trends, mortgage rate movements, new home construction) will have an influence on your purchase. The more you know the more control you have.
In a buyer’s market, the number of homes available for sale exceeds the demand, so prices will either stabilize or drop. With fewer buyers and more homes, you not only have more options to choose from, you also have greater negotiating leverage. You have more time to look for the right home and you can evaluate the choices without feeling pressure to act too quickly.
Another major influence on your decision to buy is the mortgage interest rate. What rates are available now? Will they drop in the immediate future? Will they rise? If so, by how much?
To calculate how much you can afford to spend on a house, go to Step 3: Calculate Your Costs.
For information on mortgage rates and financing options, go to Step 5: Arranging Your Mortgage.