Buying a new home is an exciting experience that comes with both ups and downs. It’s perfectly normal to have questions along the way, from the timeline to the costs to options to financing. One pressing question right now is should I buy a home in 2023?
EG Home believes that building your dream home is always a great decision if you’re ready to take that journey. And when you are ready, we’re here to make every part of that journey stress-free and enjoyable!
What Are Some Housing Market Trends?
With the fluctuations in pricing and interest rates in 2022, it’s no wonder prospective homebuyers are a little wary. But here in the Northeast, the housing market has been relatively stable. Why? Primarily, the combination of stable local economic conditions, proximity to larger employment centers, and more affordable housing.
According to a recent analysis of housing market trends for Connecticut, the region has weathered the pandemic relatively well. In fact, after years of stagnation, the pandemic actually stimulated home values. Low interest rates, healthy competition, and a lack of inventory helped home values in Connecticut increase more than in most other states in the last two years.
And the housing market forecast is pretty sunny, too! Per Realtor.com, the Hartford/West Hartford/East Hartford region is ranked #1 on its “Top 10 Housing Markets Positioned for Growth in 2023”! Based on sales and price projections, their experts see healthy growth in CT during what is likely to be a challenging year in many regions.
Forbes.com concurs, saying “After years of high-flying tech cities dominating real estate who’s-who lists, this year’s top performers are expected to be modest, mid-sized domestic industry hubs in the Northeast, South, and Midwest. The slow and steady real estate markets in these areas where homes continue to be affordable will be the stars in 2023, better weathering the affordability challenges that loom ahead.”
Along with this positive news, low inventory levels present some challenges – and opportunities – for buyers. According to the National Association of Realtors®, “the inventory of existing homes on the market in December 2022 was at an all-time low.” Additionally, homeowners who might be expected to sell right now (move-up buyers, downsizers) aren’t because they’re reluctant to make a move when interest rates are so high. If you’re waiting for an existing home to come on the market, it could be a LOOOOONG wait. Or, you might consider a newly built home instead.
Many homebuyers might assume that an existing home is more affordable than a new one, but it’s not that simple. While new homes may have a higher price upfront, these homes can actually end up being a better financial choice. “It is true that new-construction homes, on average, are 10% to 15% higher in sales price than resale homes, but that doesn’t mean that they are less affordable,” says Bob Seeman, vice president of sales for New Homes at Realtor.com. “Simply put, total homeownership costs are more than a monthly mortgage payment alone.” In other words, a brand new home is cheaper and easier to maintain than an older, existing home.
Costs matter whether you’re buying your first home or third. There is no denying that a used home will cost more in the long run due to repairs and maintenance. (For example, the older roof, water heater, heat pump, appliances…) A new home is packed with smart, energy-efficient features that will save on utility bills. It also offers true peace of mind, with state-of-the-art construction & materials, all new everything, and warranties that cover repairs for years to come. The only surprise will be how much free time you have!
There Is Never A Better Time To Buy A Home Than Right Now!
The current housing market has left prospective homebuyers wondering whether to put their real estate plans on hold or move ahead with purchasing a new home. The BIG question: Is now the right time to buy a house? Interest rates are still close to historic lows, and the benefits of homeownership are undeniable. So, the answer really depends on your needs and your current financial position.
If you’re asking “Should I buy a house?”, you should ask yourself these questions, too.
Are you financially prepared?
In addition to mortgage expenses, the other costs that go with owning a home add up. For example, property taxes, insurance, homeowners’ association dues, and additional maintenance costs.
- Savings. You’ll need funds for a down payment and closing costs, and for moving and post-purchase expenses. Down payment requirements vary by type of mortgage and lender. The more you put down, the lower your monthly mortgage payment.
- Credit. Lenders generally offer the best mortgage rates and terms to borrowers with credit scores of 740 and above, although you can qualify for a mortgage with a score in the 600s. If your credit is marginal, it might be wise to postpone buying a house and work on building your credit.
- Debt. Lenders look at your debt-to-income ratio to help determine whether you qualify for a mortgage. Your DTI is the percentage of your monthly gross income that goes toward monthly debt payments, including housing costs, as well as car, student loan, credit card, and other debt obligations. The lower your DTI, the better your chances of qualifying for a mortgage and getting offered the lowest available rate.
How’s your financial and/or job stability?
A mortgage is a big commitment and can become a burden after a job loss. If job insecurity is a possibility, it’s not a good time to buy a home. Wait until your employment situation is stable before thinking about buying a house.
Are you prepared to stay put for a while?
Think about your goals, relationships, and interests. How long do you see yourself living in this home? Ideally, you’d want to remain in the home long enough for rising property values and equity to exceed the costs of buying and selling. That will typically take a number of years.
At EG Home, we’ve always believed that building or buying a new home is an investment in your family’s future and should be looked at as a long-term financial and lifestyle decision. Although there may be short-term fluctuations, your home’s value is most likely going to increase when looked at as a long-term investment of five or more years. So if you are interested in building or buying a new home, and feel that you are ready, an EG home is a great investment, financially and emotionally.
Contact EG Home Today!
It’s important to have a team of experts accompany you on your new construction home journey. As a trusted builder, EG Home would be honored to be your guide! Whether you’re looking to build your dream home from the ground up or need a home ready to go, we’ll work with you every step to ensure your satisfaction with your new home. Connect with us online or by phone with any questions about our homes in Connecticut.