Home prices are high and so is uncertainty.
3 minute read
Surging home prices suggest that many who are working from home and find themselves without working space are in the market for a bigger house. People struggle to setup offices in their already cramped houses and now with offices running remotely people can pretty much work from anywhere in the country, moving to ‘ZOOM’towns. This is pushing prices up and making staying where you are a better option.
Record low mortgage rates enticed new buyers, while suburban hot-spots for the virus drove people out of cities and too smaller towns due to being able to work remotely. But be careful, many home buyers forget to budget for home repair and maintenance which typically costs 2-4% of a house’s value per year. And financial uncertainty can cause a rude awakening for new owners.
A pay cut or job loss might even lead homeowners to sell assets in their retirement accounts — sometimes at their lowest values — to pay the mortgage. This is a terrible financial setback; some of the worst-hit families in the 2018 Recession were those who lost their jobs and were stuck in their new homes.
Wait till the pandemic is over, sharing a small space is tough. But paying for a bigger one can be even tougher.
Should I rather build?
It’s cheaper to build a home than ever before. If you build a home now, you will be locking in the lowest interest rates in history. That means you can afford to better your house for less money. Your monthly payments will be less. These rates will not be around forever, so don’t overspend. Also keep an eye on what houses in your area goes for so to not over-invest.
The nice thing about building on is, it can be designed to your specifications and maintenance and repair cost will not cause you any headache as when you are buying another house.