Only Buy When You Can Afford
When you have enough liquidity, you are ready as a homebuyer. Buying a house when you cannot afford it and just because it is available at a lucrative price may not be the right decision. Hence, once you are ready, the time is right.
Low-Interest Rates in the Economy
If you have decided to finance most of your home purchase through a loan, the best time to do so is when the interest rate cycle in the economy is at all-time lows. And this is generally the case when an economy is emerging from recessionary trends. This is when home loans are available at cheap prices, and your cash outflow in EMI payments remains in control.
Downturn in the Real Estate Cycle
Also, when the local real estate market where you decide to purchase a house is in a downturn and prices are trending lower, it is an opportune time to buy a home. You can confirm that prices are low by looking at the rental yields (rent/price of a house). If the rental yields are high, real estate prices have fallen!
Just Before the Locality is Developed
If you can afford a house, the right time to purchase it is just before the house’s location becomes a developed area. For example, a metro project that passes through your locality might be announced, or there might be an airport coming up, the road which passes by your house. This way, homebuyers can reap the benefits of appreciating real estate prices because of government projects coming up in the nearby areas.
When Your Liabilities are Under Control
Also, the right time to buy a house arrives when your liabilities are under control after you have accounted for the outgoing EMI payments on the home loan you will take. This is an essential aspect when deciding to buy a house.
These are some significant factors that homebuyers can consider to assess the right time to purchase a house. The end goal of this exercise is to avoid a financial burden on oneself or end up overpaying for a property. Thus waiting for the right time becomes essential!
