Homeownership has held on as a hallmark of the American dream. Economic downturns may slow it down temporarily, but after several years, home purchases begin bouncing back. In Redding, the real estate market is looking good–market values are up and interest rates are still low. But here are some other indicators when it’s time for you to buy a home.
Your Rent Keeps Increasing
If your landlord keeps hiking up the rent until it’s higher than a double house payment, it’s time to consider other options. According to some experts, high rents are motivating millennials to buy. In San Francisco, a one-bedroom is as high as $3,500. New York City is close behind, with one-bedroom rents ranging up to $3,100. Since 2010, rents have jumped an average of 15 percent while income levels have increased by only 11 percent. And according to Forbes, buying a house is up to 38 percent more economical than renting. Use this calculator from the New York Times to see where you’re at on the buying/renting scale.
You Can Afford It
While buying may sound like the wiser choice, it’s mostly a wiser choice when you can produce a 20 percent down-payment. If you have zero money down, you should wait and save up. Take on a second job if you have to, but don’t let yourself get strapped down to a mortgage that takes you over your head. Establish a steady income–preferably multiple streams of income–before signing up for a mortgage. Oh, and don’t buy more house than you can afford right now. (No, don’t bank on that promised upcoming raise.)
You’re Staying in the Area
If you prefer a nomadic lifestyle, buying probably isn’t for you. However, if you want a solid location to call home–even if you do travel frequently–and you’ve decided to stay in the area for at least five years, then buying is a good option.
You Don’t Mind Responsibility
With homeownership comes extra responsibility. There will be closing fees and maintenance costs (you get to replace the furnace or the roof or whatever is not working). There could also be housing association fees. You’ll need some extra money for expenses that come up (and they will).
You’re Ready For It
When you decide to get a piece of real estate of your own, don’t do it because your parents said you should or because all your friends are buying houses. Do it because it’s the right time for you. In this case, it may not matter if renting is cheaper–you’ll be buying a house because you want to realize a dream.
It’s a good time to buy real estate in Redding. Whether or not it’s a good time for you to buy depends on whether you fit these five criteria for homeownership. Make the choice wisely.