Today’s post will cover the topic of “Should I Buy A House Right Now?” This has to do with everything that is going on with COVID-19 and people’s future of one day owning a home. This question comes from a redditor concern on what to do next.
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Below is the question from reddit that olorenzo8 asked.
So I’ve been looking for a home for the past year, finally getting close to finding one, have an offer in currently, but now I am wondering if I should hold off on purchasing a home with all of this COVID-19 shutdowns happening across the US. I speak mainly in reference to house prices dropping or decline in housing market, I know rates are good right now, but lots of things happening because of COVID-19, thoughts?
Below are responses from others that gave advice. Just know that this is not professional advice and only opinion.
They think prices will come down. Personally I think that too, but I have been wrong about many things, many times. In all honesty, if you’re stable, got a good interest rate, and you feel like this is the house, then you’re probably good to go.
Best time to buy a house is when you’re ready. If you got your finances, got a decent rate, can handle 6 months of mortgages with no income, and can throw extra at the mortgage with your current income, found a house you really like, go for it!
My personal view is that there is no benefit to buy in the immediate future, but there very well may be some downsides. Not to mention rates are up due to the volume of people refinancing. I don’t believe rates will go up in two months, but we could be in a whole new economic environment….. or not. But at these prices and current environment, there’s no upside for me currently.
A lot of people, many living check to check, will be losing their jobs. Some will also lose their homes. If you have the cash, hold on to it and wait a few months. This has just begun to play out, we are at the beginning, not the end.
While the response above is a valid point, don’t go into panic mode. If you have lost your job then you really need to cut unwanted spending habits and apply for unemployment if you can. Do not lose hope!
clay12340 had the best response while looking through the comments. It says:
My personal opinion is that given the current financial instability it is probably not the safest time to engage in any major expenditure that isn’t required. We’ve got several remodeling projects around the house that we’d been planning out for the spring that we’ve pumped the brakes on. I just can’t personally justify tying up that liquid cash into new siding and a kitchen at this time.
Scenario 1: Nothing happens personally or locally economy wise. We go into summer not having some projects done. We lose a few months of a prettier house. No real pain was caused.
Scenario 2: We suffer a personal economic setback, but locally the economy is fine. Our emergency fund would cover it, but that extra padding is still nice. We’d highly regret the expenditures if we did them.
Scenario 3: Both our personal economic situation and the local economy worsen. Everyone is hurting, but in that scenario I’d still rather have the cash on hand.
Scenario 4: We don’t suffer any economic setbacks, but the local economy does. This scenario likely presents a lot of new options depending on what happens. The only way to make the best decision in that scenario is to have the cash on hand.
The only way I could see regretting not spending now would be if for some reason the house or projects skyrocket in cost after the crisis gets cleared up. That seems like a very unlikely scenario to me. Maybe if your looking to buy a home across the street from a biotech start up that has a promising covid vaccine in the works or something. Otherwise, I’d feel pretty safe betting against this.
I have been making post like this because people have been asking good questions and receiving lots of advice from others. I think that being able to hear what others say helps shape decisions that you might be thinking about pursuing.
Hopefully you found this post informative and will pass it along to someone else. Thanks for supporting The Finance Starter and reading all the content I write ( or in this case quote a lot). Stay safe out there, invest wisely, and save your money.