Your decision isn't final. You're still early in the home-buying process. You don't have to decide once and for all whether now is the right time for you to buy. At each step of the process, you still make a tentative decision based on the information you have available to keep moving forward, wait for a better time, or stop. As you get more precise information about home prices and loan costs, you can continue to reevaluate whether the value you get from buying is worth the price you have to pay.
If what you can afford to pay for a home isn't enough to get the type of home you want in a neighborhood you enjoy, you may want to consider:
- Cutting back your optional monthly spending so you can afford a higher monthly payment
- Waiting to buy until you can save enough for a higher down payment
- Renting in or near the neighborhood you're interested in
Keep an open mind. Depending on your location and how long you expect to live in the home, buying or renting might be the right financial choice for you right now.
In some situations, it may be better to rent. Is your current employment short-term or unstable? Owning a home is a big financial commitment. If you're not confident that you can continue earning a similar income for the foreseeable future, it might make more sense to keep renting. Is there a chance you might move within the next few years? Renters have more flexibility. It can be risky and expensive to buy if you end up needing to move again within the next few years. You pay real estate agent commissions, taxes, and other transaction costs to sell your home and buy a new one. If prices decline, you may not be able to sell your home at all.