This blog was provided by our expert finance partners at Pulte Mortgage.

 

With all the changes in the real estate market, you may wonder, “Is it the right time to buy a home?” Don't worry, we can help you decide if this is the right time to buy a home for you. Despite interest rates going up, there are still plenty of great reasons why now is a fantastic time to make your next home a reality. Let's dive in.

 

Summary:

• Factors to Decide When It’s the Best Time to Buy a House for You
• Pros and Cons of Buying a New Build Home in Today’s Market
• Finding the Perfect Financing Option for Your New Build
• Tips and Tricks to Help You Get the Best Price on Your New Home
• What to Look for When Choosing a Location for Your New Home

 

Factors to Decide When It’s the Best Time to Buy a House for You

Buying a home is a big decision that deserves your attention, and we're here to help. In a constantly evolving real estate market, there are some key factors to consider before taking the leap into homeownership. Let's explore together and figure out if now is the perfect time for you to look at buying your next home.

 

Financial Readiness

Is it the right time to buy a home? Your financial health holds the key. You’ll want to delve into your credit score, debt-to-income ratio, and savings. We want to make sure taking on a mortgage is in line with your financial goals.

 

Housing Market Conditions

Pros and Cons of Buying a New Build Home in Today’s Market

With fluctuating prices and unpredictable circumstances, it's hard to determine if it's the right time to buy a home. However, new build homes come with their own set of pros and cons that you should consider before making a purchase. You’ll want to look at some market condition pros and cons on top of the usual factors. Ultimately, it's up to you to weigh these factors and decide if buying a new build home is the right choice for you in today's market.

 

Pros

• Less Competition - With interest rates on the rise and the housing market continuing to cool off, industry professionals are expecting the number of homes for sale to increase. This, combined with the decline of stressful bidding wars and above-asking-price offers, could mean less competition (and stress!) when searching for a new home.

• Increased Equity - One of the best benefits of homeownership is the home equity you can build over time. Despite home prices continuing to rise largely in part due to inflation, if you are purchasing in an area with consistent growth, it is likely your home value will continue to rise above what you paid for it.

• Builder Incentive Offers - As the market begins to shift, now could be a great time to take advantage of incentive offers from your home builder! These incentives could include covering your new home’s closing costs or temporarily lowering your interest rate with a buydown. Reach out to your nearby Del Webb Community’s Sales Consultant or Pulte Mortgage Representative to learn more about Del Webb incentives in your area!

 

Cons

• Interest Rates - While higher interest rates may dissuade many homebuyers in today’s market, remember that you should “marry the house and date the rate!” If you are financially ready and you find your dream home, it’s best not to wait around. You can always choose to refinance your home once interest rates drop.

• Upfront Costs - No matter the market, buying a home comes with some hefty costs. If you have big-ticket priorities, such as paying down debts or finishing your degree, you’ll want to carefully consider if buying a new home right now is the best choice.
  

• Long-Term Commitment - When you purchase a home, you’ll be putting down roots for several years, at least. A good rule of thumb is that you’ll need to stay in your home for at least five years to start building equity. So if you do intend to buy a home, know that you may be making a five-year minimum commitment before you’ll start getting any return on your investment.

 

Your Priorities

The true motivations behind homebuying aren’t just about the market; it's about the meaningful moments that shape our lives. Maybe it's time to downsize or be closer to your loved ones, and these personal factors could be the driving force behind your decision to purchase a new home sooner rather than later. Let's explore some of the top life priorities that lead people and families to embrace their next home.

• Family - Family comes first for many buyers. Whether it's the excitement of a growing family and the need for more room, or the heartfelt desire to be closer to loved ones and create a greater sense of togetherness, family could make the difference when deciding if it’s the right time to buy a home for you.

• Space - Some homebuyers look for more space for a growing family or downsize for a simpler, more manageable living environment. Whether it's a spacious haven or a downsized oasis, finding the perfect fit for your lifestyle and enjoying the benefits of a home that meets your needs could factor into whether it’s the right time to buy a home.

• Career - Whether you want to cut down on your commute or you’ve gone remote and need more space, embracing a better work-life balance is key to many homebuyers.

• Lifestyle - Many homebuyers take their lifestyle into consideration when looking to buy a home. Whether it’s urban conveniences or suburban tranquility, your desired lifestyle will be a big factor when choosing to buy a home.

 

Finding the Perfect Financing Option for Your New Build

Working with an affiliate mortgage company offers more flexibility than using an outside lender, as the mortgage company is familiar with the builder’s process and can work more closely with the builder to ensure a smooth and timely closing. Partnering with a homebuilder’s affiliated lender like Pulte Mortgage can streamline the financing process and ensure a smoother, stress-free experience for new buyers!

 

Tips and Tricks to Help Get the Best Price on Your New Home

No matter what the housing market looks like, there are several tools that homebuyers can utilize to snag the best price on their new home!

 

Buydowns

When mortgage rates are on the rise, your lender may offer a mortgage rate buydown to help temporarily or permanently reduce your interest rate. This can help you save money by lowering your monthly payments during the initial loan term!

What is a buydown?

A buydown involves paying an upfront sum at the time of closing, which is then applied to reduce the interest rate for an agreed-upon period, often the first few years of the mortgage term. Homebuyers might opt for a buydown to alleviate initial financial strain, making homeownership more accessible. It's a nuanced approach that allows buyers to enjoy lower monthly payments early on, gradually stepping up as the interest rate adjusts to its original terms.

 

The most common mortgage buydown structures used are 3-2-1 buydowns and 2-1 buydowns.

 

3-2-1 Buydowns

A 3-2-1 buydown enables a buyer to pay less interest on their mortgage for 3 years after obtaining the loan. The points paid upfront reduce the interest rate by 1% for each of those first 3 years. For example, say a homebuyer qualifies for a 30-year mortgage at an interest of 5%. With the 3-2-1 buydown, they would pay an interest rate of 2% the first year, 3% the second year and 4% the third year but would have to pay the full 5% from years 4 – 30.

 

2-1 Buydowns

A 2-1 buydown applies to only the first 2 years of the loan where the interest rate would be 2% lower in the first year and 1% lower in the second. Using the previous example, the buyer would be expected to pay an interest rate of 3% the first year, 4% the second year and 5% from years 3 – 30.

 

Refinance

Homebuyers possess a valuable tool in their financial toolkit: the option to refinance once interest rates decrease! Refinancing, or “refi,” not only helps in managing costs but also provides an opportunity to adapt to changing circumstances and take advantage of improved financial conditions.

 

Builder Incentives

A big advantage of buying a new construction home is the financing incentives that are often available to buyers. Many homebuilders have affiliate mortgage companies that offer financing incentives such as lower closing costs, reduced interest rates, or other perks that can help you save money! Speak with a Del Webb Sales Consultant for the most current incentives.

 

What to Look for When Choosing a Location for Your New Home

If after weighing the factors and your priorities you find that it’s time to find the perfect home in this housing market, then that means you get to start the exciting task of researching locations!

 

Here are some of the top location and proximity factors to consider in this market:

• Amenities
• Nearby schools
• Restaurants and shops in the area
• Commute
• Quality of life
• Lifestyle fit
• And more

By doing your research and carefully weighing your options, you can find the perfect location for your new home. Explore new construction homes today to get an idea of what’s available.

 

Conclusion

Despite rising interest rates, the housing market still offers incredible opportunities. There are some timeless benefits that go beyond the ups and downs of the current market. Depending on your priorities, you may find that those call you to buy a new home sooner than later.

 

Explore new construction homes today or browse more Del Webb blogs.

 

 

Written By: Meagan Rochard, a copywriter for Pulte Financial Services.

Last Updated: 12/15/23