What is Happening in the Mortgage Market

First-time home buyers usually come to the home purchasing process with a lot of questions and a specific mindset. New buyers have many reasons to transition from renting to buying; some of them practical, some financial and some psychological. If you’re thinking of buying a home, examine your situation and mindset to make sure you’re actually ready to buy. You may find that you’re not in the right mental state, or that you lack the financial resources - or you may find yourself ready even if you didn’t think you were.

Why People Rent

People rent homes for a variety of reasons, but the strongest arguments against buying are usually a combination of financial and practical. These are the common reasons that people continue to rent:

•      Unsure about where they want to live;

•      Job may require them to relocate;

•      Don’t have enough money for a downpayment;

•      Unsettled personal life;

•      Don’t want to be tied down;

•      Think they can’t afford the home they really want;

•      Uneducated about the benefits of home ownership.

Some of these reasons are valid, but some are a fallacy. Things like not having enough money for a downpayment, thinking you can’t afford the home you want or being generally uneducated are not good excuses not to buy. There are ways around these issues. But if you aren’t sure where you want to live, might have to relocate for work or simply don’t want to be tied down, now probably isn’t the right time to buy.

Why New Home Buyers Buy

New home buyers buy homes for a variety of reasons, some valid and some not:

•      It’s part of the American Dream;

•      Parents expect them to buy;

•      They’ve saved up enough money for a downpayment;

•      See home-buying and building equity as an enforced savings plan;

•      Tired of “throwing money away” on a rental apartment;

•      Don’t want to deal with landlords;

•      Want to own their own home.

Things like buying a home because it’s expected are bad reasons to buy. You might find yourself in the wrong place or the wrong home if you surrender to that mentality. But if you’ve saved up enough money for a downpayment, feel that a home is genuinely a good investment and want to own your own home, you might be ready to buy.